Attached files
FRP HOLDINGS, INC./NEWS
Contact: John D. Milton, Jr.
Chief Financial Officer 904/858-9100
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FRP HOLDINGS, INC. (NASDAQ: FRPH) ANNOUNCES RESULTS FOR THE FIRST QUARTER OF
FISCAL 2016.
Jacksonville, Florida; February 3, 2016 -
Fiscal 2016 First Quarter Consolidated Results of Continuing Operations.
Income from continuing operations for the first quarter of fiscal 2016 was
$7,473,000 or $.76 per share versus $1,131,000 or $.12 per share in the first
quarter last year. This first quarter of fiscal 2016 benefited from a gain on
land sale of $6,286,000 plus income of $3,000,000 from the settlement of
environmental claims resulting in a positive impact of $.57 per share of income
from continuing operations. Total revenues were up $521,000, or 6.3%, versus
the same quarter last year. Excluding the positive impact of the environmental
settlement this quarter ($3 million) and the negative impact of corporate costs
not allocated to discontinued operations in the first quarter last year
($919,000), consolidated total operating profit was up 10.3%.
First Quarter Segment Operating Results.
Mining Royalty Lands Segment:
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Total revenues in this segment were $1,659,000, an increase of 23.4%, versus
$1,344,000 in the same quarter last year as total tons mined at our locations
increased by 29.0%. Total operating profit in this segment was $1,470,000, an
increase of 66.7%, versus $882,000 in the first quarter of last year.
Management periodically analyzes the amount of corporate and management company
time spent on each segment and in the most recent analysis it was determined
that less time was being spent on the mining segment versus prior years when
management was working on mining related transactions, such as the Lake Louisa
acquisition, and the spin-off, which benefited all segments of the business.
As a result, the allocation of corporate expense to this segment was reduced
and reallocated to our other two segments resulting in $263,000 less corporate
expense in this quarter versus the same quarter last year.
Land Development and Construction Segment:
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The Land Development and Construction segment is responsible for managing and
developing our non-income producing properties into income production. In this
quarter, this segment successfully closed on the sale of Phase II of the
Windlass Run residential land (a non-income producing property) for
$11,288,000. Using $9,900,000 of the proceeds from that sale in a Section
1031 exchange, the Asset Management segment acquired the Port Capital building,
a 91,218 square foot, 100% occupied, warehouse with first full year projected
rental revenue of $594,000. In addition, construction of the 80,000 square
foot spec warehouse at Hollander Business park will be completed during the
second quarter of this fiscal year and, upon receipt of a Certificate of
Occupancy, will be transferred to the Asset Management segment for lease-up.
Lastly, management successfully completed negotiations and entered into a
$3,000,000 settlement of environmental claims against our former tenant at the
Riverfront on the Anacostia property and continues to pursue settlement
negotiations with other potentially responsible parties. Management
anticipates committing to develop Phase II of the Riverfront on the Anacostia
project during this fiscal year at which time we will likely book a liability
for the estimated incremental cost of remediation similar to what we booked
with regards to Phase I.
Revenues for this segment were up $48,000 over last year's first quarter due to
higher real estate tax reimbursement from the ground lease at our Square 664E
property in D.C. Costs of operating this segment (excluding the $3,000,000
positive benefit from the environmental settlement at Anacostia) were up
$224,000 in the quarter driven primarily by higher property taxes at our
Anacostia Phases II-IV property and the reallocation of corporate expenses
from the Mining Royalty Lands segment.
Asset Management Segment:
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Total revenues in this segment were $6,915,000, up $158,000 or 2.3%, over the
same quarter last year. The increase was due mainly to completion of the third
build-to-suit in the middle of the same quarter last year and the acquisition
of the Port Capital building in October offset by the lack of revenues
($138,000) from a building that was vacated in January 2015 as a result of the
tenant outgrowing the space. Cost of operations increased $234,000 due mainly
to the reallocation of corporate expenses from the Mining Royalty Lands segment
and an increase in operating expenses due primarily to transaction specific
fees and costs (e.g. the 1031 exchange) partially offset by a reduction of
$98,000 in property taxes due mainly to a successful appeal of taxes on the
three build-to-suit buildings at our Patriot Business Park.
Summary and Outlook. We are focused on building shareholder value through our
real estate holdings - mainly by growing our portfolio through the conversion
of our non-income producing assets into income production. This strategy is
two pronged in that we (i) sell land that is not conducive to warehouse/office
development and use the proceeds to acquire existing income producing
warehouse/office buildings (typically in a Section 1031 exchange) and (ii)
construct new warehouse/office buildings on existing pad sites in our developed
business parks. Over the past five years, we have converted 172 acres of non-
income producing land into 766,216 square feet of income producing properties
with estimated FY 2016 rental revenues of $5,115,000. We saw another quarter
of real improvement in mining royalties due mainly to increased volumes at most
of our locations and, barring another major economic downturn in the US, we are
confident that trend will continue for the foreseeable future.
During the remainder of fiscal 2016, we expect to spend approximately $4
million on the construction of a new bulk head at the Square 664E property in
anticipation of future high-rise development and continue working with our JV
partner, MRP, to complete the construction of Phase I of Riverfront on the
Anacostia (now named Dock 79) and to continue planning for the commencement of
Phase II.
Conference Call.
The Company will host a conference call on Wednesday, February 3, 2016 at 1:00
p.m. (EST). Analysts, stockholders and other interested parties may access the
teleconference live by calling 1-800-973-1544 (pass code 68134) within the
United States. International callers may dial 334-323-7224 (pass code 68134).
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/frp020316. For the
archived audio via the internet, click on the following link
http://archive.conferenceamerica.com/archivestream/frp020316.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 877-919-4059, international
callers dial 334-323-0140. The passcode of the audio replay is 51125827.
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.
FRP HOLDINGS, INC.
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CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)
THREE MONTHS ENDED
DECEMBER 31,
2015 2014
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Revenues:
Rental revenue $ 6,027 5,868
Royalty and rents 1,638 1,320
Revenue - reimbursements 1,158 1,114
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Total Revenues 8,823 8,302
Cost of operations:
Depreciation, depletion and amortization 1,896 1,883
Operating expenses 973 914
Environmental remediation recovery (3,000) -
Property taxes 1,118 1,095
Management company indirect 504 352
Corporate expenses 732 1,713
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Total cost of operations 2,223 5,957
Total operating profit 6,600 2,345
Interest income 1 -
Interest expense (481) (445)
Equity in loss of joint ventures (54) (30)
Gain (Loss) on investment land sold 6,286 (17)
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Income from continuing operations before income taxes 12,352 1,853
Provision for income taxes 4,879 722
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Income from continuing operations 7,473 1,131
Gain from discontinued transportation operations,
net of taxes - 1,663
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Net income $ 7,473 2,794
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Comprehensive net income $ 7,473 2,794
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Earnings per common share:
Income from continuing operations-
Basic $ 0.76 0.12
Diluted $ 0.76 0.12
Discontinued operations-
Basic $ 0.00 0.17
Diluted $ 0.00 0.17
Net Income-
Basic $ 0.76 0.29
Diluted $ 0.76 0.29
Number of shares (in thousands) used in computing:
-basic earnings per common share 9,802 9,711
-diluted earnings per common share 9,853 9,771
Asset Management Segment Results
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Three months ended December 31
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(dollars in thousands) 2015 % 2014 % Change %
-------- ------- -------- ------- -------- -------
Rental revenue $ 5,908 85.4% 5,744 85.0% 164 2.9%
Revenue-reimbursements 1,007 14.6% 1,013 15.0% (6) -0.6%
-------- ------- -------- ------- -------- -------
Total revenue 6,915 100.0% 6,757 100.0% 158 2.3%
Depreciation, depletion and amortization 1,798 26.0% 1,786 26.4% 12 0.7%
Operating expenses 839 12.1% 675 10.0% 164 24.3%
Property taxes 659 9.5% 757 11.2% (98) -12.9%
Management company indirect 231 3.4% 153 2.3% 78 51.0%
Corporate expense 378 5.5% 300 4.4% 78 26.0%
-------- ------- -------- ------- -------- -------
Cost of operations 3,905 56.5% 3,671 54.3% 234 6.4%
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Operating profit $ 3,010 43.5% 3,086 45.7% (76) -2.5%
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Mining Royalty Land Results
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Three months ended December 31
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(dollars in thousands) 2015 % 2014 %
-------- ------- -------- -------
Royalty and rents $ 1,638 98.7% 1,320 98.2%
Revenue-reimbursements 21 1.3% 24 1.8%
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Total revenue 1,659 100.0% 1,344 100.0%
Depreciation, depletion and amortization 34 2.0% 31 2.3%
Operating expenses 41 2.5% 55 4.1%
Property taxes 59 3.6% 58 4.3%
Corporate expense 55 3.3% 318 23.7%
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Cost of operations 189 11.4% 462 34.4%
Operating profit $ 1,470 88.6% $ 882 65.6%
Land Development and Construction Segment Results
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Three months ended December 31
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(dollars in thousands) 2015 2014 Change
-------- -------- --------
Rental revenue $ 119 124 (5)
Revenue-reimbursements 130 77 53
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Total revenue 249 201 48
Depreciation, depletion and amortization 64 66 (2)
Operating expenses 93 184 (91)
Environmental remediation recovery (3,000) - (3,000)
Property taxes 400 280 120
Management company indirect 273 199 74
Corporate expense 299 176 123
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Cost of operations (1,871) 905 (2,776)
-------- -------- --------
Operating loss $ 2,120 (704) 2,824
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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
measures included in this press release are adjusted operating profit and net
operating income (NOI). FRP uses these non-GAAP financial measures to analyze
its continuing operations and to monitor, assess, and identify meaningful
trends in its operating and financial performance. These measures are not, and
should not be viewed as, substitutes for GAAP financial measures.
Post Spin-off we are reporting any net gain/(loss) from the transportation
business as "discontinued operations" and we currently have no other
discontinued operations being reported. GAAP accounting rules do not allow
corporate overhead expenses to be allocated to a discontinued operation of the
Company; thus, those corporate expenses attributable to the transportation
business prior to the spin-off are charged to the Company as part of continuing
operations.
Adjusted Operating Profit
Adjusted operating profit excludes the impact of the corporate expense not
allocated to discontinued operations and the environmental remediation
recovery. Adjusted operating profit is presented to provide additional
perspective on underlying trends in FRP's core operating results. A
reconciliation between operating profit and adjusted operating profit is as
follows:
Adjusted Operating Profit
Three months ended
December 31,
--------------------
2015 2014 Change %
-------- -------- -------- -------
Operating profit $ 6,600 2,345 4,255 181.4%
Adjustments:
Environmental remediation recovery (3,000) -
Corporate costs not allocated
to discontinued operations - 919
Adjusted Operating profit $ 3,600 3,264 336 10.3%
Net Operating Income Reconciliation
Year Ended 12/31/15 (in thousands)
Asset Land Mining Unallocated FRP
Management Development Royalties Corporate Holdings
Segment Segment Segment Expenses Totals
---------- ---------- ---------- ---------- ----------
Income from continuing operations $ 1,535 5,054 884 - 7,473
Income Tax Allocation 1,003 3,298 578 - 4,879
Inc. from continuing operations
before income taxes 2,538 8,352 1,462 - 12,352
Less:
Gains on investment land sold 9 6,277
Other income - 1
Unrealized rents 13 -
Lease intangible rents 14 -
Plus:
Equity in loss of Joint Venture - 45
Interest Expense 481 -
Depreciation/Amortization 1,798 64
Management Co. Indirect 231 273
Allocated Corporate Expenses 378 299
Net Operating Income (loss) $5,390 2,755
Net Operating Income Reconciliation
Year ended 12/31/14 (in thousands)
Asset Land Mining Unallocated FRP
Management Development Royalties Corporate Holdings
Segment Segment Segment Expenses Totals
---------- ---------- ---------- ---------- ----------
Income from continuing operations $ 1,635 (452) 509 (561) 1,131
Income Tax Allocation 1,046 (291) 325 (358) 722
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Inc. from continuing operations
before income taxes 2,681 (743) 834 (919) 1,853
Less:
Lease intangible rents 12 -
Plus:
Loss on investment land sold - 17
Unrealized rents 45 -
Equity in loss of Joint Venture - 22
Interest Expense 405 -
Depreciation/Amortization 1,786 66
Management Co. Indirect 153 199
Allocated Corporate Expenses 300 176
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Net Operating Income (loss) $ 5,358 (263)
