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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) November 8, 2023

 

 

FRP HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

FLORIDA

(State or other jurisdiction of incorporation)

001-36769

(Commission File Number)

47-2449198

(IRS Employer Identification No.)

 

200 W. FORSYTH STREET, 7TH FLOOR

JACKSONVILLE, FLORIDA

(Address of principal executive offices)

32202

(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 8, 2023, FRP Holdings, Inc. issued a press release announcing results of operations for the third quarter ended September 30, 2023. 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 8, 2023

 

 

 

 

 

 

 

 

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 8, 2023 By:   /s/John D. Baker III  
    John D. Baker III  
    Chief Financial Officer  

 

EX-99 2 frphsep23_pr.htm FRPH SEP 2023 EARNINGS RELEASE

FRP Logo-Black FRP HOLDINGS, INC./NEWS

 

Contact: John D. Baker III

             Chief Financial Officer                                                                                            904/858-9100

 

FRP HOLDINGS, INC. (NASDAQ: FRPH) ANNOUNCES RESULTS FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2023

 

FRP Holdings, Inc. (NASDAQ-FRPH) Jacksonville, Florida; November 8, 2023 –

 

Third Quarter Operational Highlights (compared to the same quarter last year)

· 29.5% increase in pro-rata NOI ($8.09 million vs $6.24 million)
· Mining royalty revenue increased 24.7%; 19.2% increase in royalties per ton
· 54.2% increase in Asset Management revenue; 58.2% increase in Asset Management NOI

 

Third Quarter Consolidated Results of Operations

 

Net income for the third quarter of 2023 was $1,259,000 or $.13 per share versus $480,000 or $.05 per share in the same period last year. The third quarter of 2023 was impacted by the following items:

 

· Operating profit increased $1,047,000 compared to the same quarter last year due to improved revenues in all four segments.
· Interest income increased $1,512,000 due primarily to an increase in interest earned on cash equivalents ($1,118,000) and increased income from our lending ventures ($349,000).
· Interest expense increased $378,000 compared to the same quarter last year due to less capitalized interest. We capitalized less interest because of fewer in-house and joint venture projects under development this quarter compared to last year.
· Equity in loss of Joint Ventures increased $1,035,000 primarily due to increased losses during lease up at The Verge ($856,000).

 

Third Quarter Segment Operating Results

 

Asset Management Segment:

 

Total revenues in this segment were $1,442,000, up $507,000 or 54.2%, over the same period last year. Operating profit was $520,000, up $255,000 from $265,000 in the same quarter last year. Revenues and operating profit are up because of full occupancy at 1841 62nd Street (compared to 22.7% same period last year) and the addition of 1941 62nd Street to this segment in March 2023. We now have nine buildings in service at three different locations totaling 515,077 square feet of industrial and 33,708 square feet of office. At quarter end, we were 95.6% leased and 95.6% occupied. Net operating income in this segment was $1,096,000, up $403,000 or 58.2% compared to the same quarter last year.

 

 

Mining Royalty Lands Segment:

 

Total revenues in this segment were $3,082,000 versus $2,471,000 in the same period last year. Total operating profit in this segment was $2,509,000, an increase of $509,000 versus $2,000,000 in the same period last year. This increase is the result of increases in revenue at nearly every active location. Net Operating Income this quarter for this segment was $2,837,000, up $501,000 or 21.4% compared to the same quarter last year.

 

Development Segment:

 

With respect to ongoing projects:

· We are the principal capital source of a residential development venture in Prince George’s County, Maryland known as “Amber Ridge.” Of the $18.5 million of committed capital to the project, $17.3 million in principal draws have taken place through quarter end. Through the end of September 30, 2023, 175 of the 187 units have been sold, and we have received 19.6 million in preferred interest and principal to date.
· Bryant Street is a mixed-use joint venture between the Company and MRP in Washington, DC consisting of three apartment buildings with ground floor retail and one commercial building which is fully leased. At quarter end, Bryant Street’s 487 residential units were 94.5% leased and 94.5% occupied. Its commercial space was 95.9% leased and 79.1% occupied at quarter end.
· Lease-up is underway at The Verge, and at quarter end, the building was 89.5% leased and 74.1% occupied inclusive of 25 units licensed to Placemaker Management for a short-term corporate rental program. Retail at this location is 45.2% leased.  This is our third mixed-use project in the Anacostia waterfront submarket in Washington, DC.
· .408 Jackson is our second joint venture project in Greenville. Leasing began in the fourth quarter of 2022 with residential units 93.4% leased and 86.8% occupied at quarter end. Retail at this location is 100% leased and currently under construction and expected to open this winter. 
· Windlass Run, our suburban office and retail joint venture with St. John Properties, Inc. signed a new office lease for 2,752 square feet bringing the office portion of the project to 82.1% leased and 78.3% occupied.  Additional retail space at this site is 38.2% leased and 22.9% occupied.
· This past quarter we broke ground on a new speculative warehouse project in Aberdeen, Maryland on Chelsea Road. This Class A, 259,200 square foot building due to be complete in the 3rd quarter of 2024.

Stabilized Joint Venture Segment:

 

Total revenues in this segment were $5,633,000, an increase of $157,000 versus $5,476,000 in the same period last year. The Maren’s revenue was $2,670,000, an increase of 2.4% and Dock 79 revenues increased $95,000 to $2,963,000 or 3.3%. Total operating profit in this segment was $840,000, a decrease of $66,000 versus $906,000 in the same period last year. During the quarter we experienced water damage to an elevator that resulted in a $100,000 insurance deductible expense. Pro-rata net operating income this quarter for this segment was $2,038,000, down $665,000 or 24.6% compared to the same quarter last year because of the sale of our 20% Tenancy-In-Common (TIC) interest in both properties to Steuart Investment Company (SIC), mitigated by $231,000 in pro-rata NOI from our share of the Riverside joint venture in Greenville, SC.

 

 

At the end of September, The Maren was 93.18% leased and 93.94% occupied. Average residential occupancy for the quarter was 95.57%, and 59.70% of expiring leases renewed with an average rent increase on renewals of 3.18%. The Maren is a joint venture between the Company and MRP and SIC, in which FRP Holdings, Inc. is the majority partner with 56.3% ownership.

 

Dock 79’s average residential occupancy for the quarter was 95.08%, and at the end of the quarter, Dock 79’s residential units were 93.44% leased and 95.74% occupied. This quarter, 71.43% of expiring leases renewed with an average rent increase on renewals of 2.30%. Dock 79 is a joint venture between the Company and MRP and SIC, in which FRP Holdings, Inc. is the majority partner with 52.8% ownership.

 

During the third quarter of 2022, we achieved stabilization at our Riverside Joint Venture in Greenville, South Carolina. At quarter end, the building was 94.5% leased with 91.5% occupancy. Average occupancy for the quarter was 92.92% with 52.83% of expiring leases renewing with an average rental increase of 8.55%. Riverside is a joint venture with Woodfield Development and the Company owns 40% of the venture.

 

 

Nine Months Operational Highlights (compared to the same period last year)

· 26.2% increase in pro-rata NOI ($22.69 million vs $17.97 million)
· Mining Royalties increased 23.8%; 13% increase in royalties per ton
· 46.4% increase in Asset Management revenue; 46.2% increase in Asset Management NOI

 

Nine Months Consolidated Results of Operations

 

Net income for the first nine months of 2023 was $2,422,000 or $.26 per share versus $1,809,000 or $.19 per share in the same period last year. The first nine months of 2023 was impacted by the following items:

 

· Operating profit increased $3,238,000 compared to the same period last year due to improved revenues and profits in all four segments.
· Management company indirect increased $393,000 due to merit increases and new hires along with recruiting costs.
· Interest income increased $5,001,000 due primarily to an increase in interest earned on cash equivalents ($3,637,000) and increased income from our lending ventures ($1,228,000).
· Interest expense increased $1,036,000 compared to the same period last year due to less capitalized interest. We capitalized less interest because of fewer in-house and joint venture projects under development compared to last year.
· Equity in loss of Joint Ventures increased $5,337,000 primarily due to increased losses during lease up at The Verge ($4,096,000) and .408 Jackson ($642,000).
· The first nine months of 2022 included a $874,000 gain on sales of excess property at Brooksville.

 

 

 

Nine Months Segment Operating Results

 

Asset Management Segment:

 

Total revenues in this segment were $3,932,000, up $1,246,000 or 46.4%, over the same period last year. Operating profit was $1,225,000, up $618,000 from $607,000 in the same period last year. Revenues and operating profit are up partly because of rent growth at Cranberry Run, but primarily because of full occupancy at 1865 and 1841 62nd Street and the addition of 1941 62nd Street to this segment in March 2023. Net operating income in this segment was $2,726,000, up $862,000 or 46.2% compared to the same period last year.

 

Mining Royalty Lands Segment:

 

Total revenues in this segment were $9,628,000 versus $7,779,000 in the same period last year. Total operating profit in this segment was $8,031,000, an increase of $1,592,000 versus $6,439,000 in the same period last year. This increase is the result of the additional royalties from the acquisition in Astatula, Florida, which we completed at the beginning of the second quarter 2022, as well as increases in revenue at nearly every active location. Net Operating Income in this segment was $9,110,000, up $1,737,000 or 24% compared to the same period last year. As reported in a subsequent event note in the 10-Q from the quarter ended June 30, 2023, in August we received notification of an overpayment of $842,000 at a quarry where we share a property line within the pit. The operator incorrectly identified the reserves being mined as belonging to the Company instead of our neighboring landlord. After auditing and confirming the tenant’s findings, the Company has reached a resolution with the tenant to allow the overpayment to be deducted from a portion of future royalties, and we have worked with the tenant to improve processes and controls to prevent an incident of this type and magnitude from occurring in the future. This will impact future royalty revenue and revenue growth until the overpayment is satisfied.

 

Stabilized Joint Venture Segment:

 

In the fourth quarter of 2022, as part of our new partnership with Steuart Investment Company and MidAtlantic Realty Partners, we sold a 20% ownership interest in a tenancy-in-common (TIC) of Dock 79 and The Maren for $65.3 million, $44.5 million attributable to the Company, placing a combined valuation of the two buildings at $326.5 million.

 

Total revenues in this segment were $16,454,000, an increase of $493,000 versus $15,961,000 in the same period last year. The Maren’s revenue was $7,900,000, an increase of 5.7%, and Dock 79 revenues increased $66,000 or .8% to $8,553,000. Total operating profit in this segment was $2,556,000, an increase of $365,000 versus $2,191,000 in the same period last year. Pro-rata net operating income for this segment was $6,212,000, down $1,029,000 or 14.2% compared to the same period last year because of the sale of our 20% TIC interest in both properties to SIC, mitigated by $676,000 in pro-rata NOI from our share of the Riverside joint venture.

.

 

 

At the end of September, The Maren was 93.18% leased and 93.94% occupied. Average residential occupancy for the first nine months of 2023 was 96.11%, and 50.66% of expiring leases renewed with an average rent increase on renewals of 4.86%. The Maren is a joint venture between the Company and MRP and SIC, in which FRP Holdings, Inc. is the majority partner with 56.3% ownership.

 

Dock 79’s average residential occupancy for the first nine months of 2023 was 94.21%, and at the end of the quarter, Dock 79’s residential units were 93.44% leased and 95.74% occupied. Through the first nine months of the year, 67.90% of expiring leases renewed with an average rent increase on renewals of 3.11%. Dock 79 is a joint venture between the Company and MRP and SIC, in which FRP Holdings, Inc. is the majority partner with 52.8% ownership.

 

During the third quarter of 2022, we achieved stabilization at our Riverside Joint Venture in Greenville, South Carolina. At end of September, the building was 94.5% leased with 91.5% occupancy. Average occupancy for the first nine months of 2023 was 94.26% with 56.03% of expiring leases renewing with an average rental increase of 10.25%. Riverside is a joint venture with Woodfield Development and the Company owns 40% of the venture.

 

Summary and Outlook

 

Royalty revenue for this quarter was up 24.7% over the same period last year, and royalty revenue for the first nine months is up 23.8%. The last three quarters have been the three highest revenue quarters in this segment’s history. Mining royalty revenue for the last twelve months is $12.53 million, a 24.7% increase over the same period last year, and the segment’s highest revenue total over any twelve-month period.

 

In the Stabilized Joint Venture segment, pro-rata NOI is down for the segment for both the quarter and the first nine months, which is to be expected after selling 20% of our share of Dock 79 and The Maren to SIC. NOI for the two projects as a whole increased 1.0% ($10,163,000 vs $10,063,000) for the first nine months compared to the same period last year. At Dock 79, average occupancy (95.08%) remains in line with historic expectations, but the high renewal rate (71.43%) with reduced increases (2.30%) is consistent with a post-Covid glut in apartment supply in the DC market as evidenced by the negative trade-outs (-4.60%) we’re seeing at that building. The Maren performed slightly better with strong renewals (59.70%) at higher increases (3.18%) and positive trade-outs (4.60%), but at rates lower than we have experienced in the past prior to the second quarter of this year. Riverside in Greenville (which was added to this segment in the third quarter of 2022) has maintained strong occupancy (93.65% LTM) in its first year post-stabilization. Renewal rates for the quarter (52.83%) and year-to-date (56.03%) are consistent with expected results, and the increase on renewals (8.55% for Q3, 10.25% YTD) remain high. Our pro-rata share of NOI at Riverside this quarter was $231,000 and $676,000 for the first nine months.

 

In our Asset Management Segment, occupancy and our overall square-footage have increased since the third quarter of 2022, leading to a 46.2% increase in NOI for the first nine months compared to the same period last year. We are 95.6% leased and occupied on 548,785 square feet compared to 85.9% occupied on 447,035 square feet at the end of the third quarter of 2022.

 

 

As mentioned last quarter and in our recent Investor Day presentation, the heady cocktail of inflation, interest rates, increased construction costs, and a softening in the DC market because of an influx of new apartment projects have led us to shift our development strategy away from new developments in DC for the time being. We are shifting towards (relatively) less capital-intensive projects like warehouse construction, where we can use our cash on hand to finance construction on an all equity basis and develop in-demand industrial product while the interest rates on construction loans keep most development on the sidelines. To that end, we are underway on the construction of a $30 million spec warehouse project at our Chelsea site in Aberdeen, MD. We anticipate shell completion on this 259,200 square-foot building in the third quarter of 2024. We will continue to do the predevelopment work required to prepare the first phase of our partnership with SIC and MRP for vertical construction, but we will pause at that point until interest rates and construction costs come back in line with what’s required to make a reasonable return. We still have the utmost confidence in our assets and the markets in which they thrive. To that end, during the first nine months of 2023 we repurchased 36,909 shares at an average cost of $54.19 per share.

 

Conference Call

 

The Company will host a conference call on Thursday, November 9, 2023 at 10:00 a.m. (EDT). Analysts, stockholders and other interested parties may access the teleconference live by calling 1-800-274-8461 (passcode 82391) within the United States. International callers may dial 1-203-518-9814 (passcode 82391). Audio replay will be available until November 23, 2023 by dialing 1-888-567-0675 within the United States. International callers may dial 1-402-530-0417. No passcode needed. An audio replay will also be available on the Company’s investor relations page (https://www.frpdev.com/investor-relations/) following the call.

 

Investors are cautioned that any statements in this press release which relate to the future are, by their nature, subject to risks and uncertainties that could cause actual results and events to differ materially from those indicated in such forward-looking statements. These include, but are not limited to: the possibility that we may be unable to find appropriate investment opportunities; levels of construction activity in the markets served by our mining properties; demand for flexible warehouse/office facilities in the Baltimore-Washington-Northern Virginia area; demand for apartments in Washington D.C. and Greenville, South Carolina; our ability to obtain zoning and entitlements necessary for property development; the impact of lending and capital market conditions on our liquidity; our ability to finance projects or repay our debt; general real estate investment and development risks; vacancies in our properties; risks associated with developing and managing properties in partnership with others; competition; our ability to renew leases or re-lease spaces as leases expire; illiquidity of real estate investments; bankruptcy or defaults of tenants; the impact of restrictions imposed by our credit facility; the level and volatility of interest rates; environmental liabilities; inflation risks; cybersecurity risks; as well as other risks listed from time to time in our SEC filings; including but not limited to; our annual and quarterly reports. We have no obligation to revise or update any forward-looking statements, other than as imposed by law, as a result of future events or new information. Readers are cautioned not to place undue reliance on such forward-looking statements.

 

 

FRP Holdings, Inc. is a holding company engaged in the real estate business, namely (i) leasing and management of commercial properties owned by the Company, (ii) leasing and management of mining royalty land owned by the Company, (iii) real property acquisition, entitlement, development and construction primarily for apartment, retail, warehouse, and office, (iv) leasing and management of residential apartment buildings.

 

 

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands except per share amounts)

(Unaudited)

 

    THREE MONTHS ENDED   NINE MONTHS ENDED
    SEPTEMBER 30,   SEPTEMBER 30,
    2023   2022   2023   2022
Revenues:                                
     Lease revenue   $ 7,509       6,823       21,773       19,850  
     Mining lands lease revenue     3,082       2,471       9,628       7,779  
 Total Revenues     10,591       9,294       31,401       27,629  
                                 
Cost of operations:                                
     Depreciation, depletion and amortization     2,816       2,744       8,415       8,510  
     Operating expenses     2,012       1,967       5,574       5,316  
     Property taxes     919       1,034       2,745       3,103  
     Management company indirect     1,059       966       2,938       2,545  
     Corporate expenses     889       734       3,212       2,876  
Total cost of operations     7,695       7,445       22,884       22,350  
                                 
Total operating profit     2,896       1,849       8,517       5,279  
                                 
Net investment income     2,700       1,188       8,207       3,206  
Interest expense     (1,116 )     (738 )     (3,251 )     (2,215 )
Equity in loss of joint ventures     (2,913 )     (1,878 )     (10,585 )     (5,248 )
Gain (loss) on sale of real estate     (1 )     141       7       874  
                                 
Income before income taxes     1,566       562       2,895       1,896  
Provision for (benefit from) income taxes     467       178       898       526  
                                 
Net income     1,099       384       1,997       1,370  
Loss attributable to noncontrolling interest     (160 )     (96 )     (425 )     (439 )
Net income attributable to the Company   $ 1,259       480       2,422       1,809  
                                 
Earnings per common share:                                
 Net income attributable to the Company-                                
    Basic   $ 0.13       0.05       0.26       0.19  
    Diluted   $ 0.13       0.05       0.26       0.19  
                                 
Number of shares (in thousands) used in computing:                      
    -basic earnings per common share     9,423       9,397       9,423       9,382  
    -diluted earnings per common share     9,460       9,433       9,463       9,423  
                                             

 

 

 

 

 

 

 

 

FRP HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited) (In thousands, except share data)

 

    September 30   December 31
Assets:   2023   2022
Real estate investments at cost:                
Land   $ 141,578       141,579  
Buildings and improvements     282,379       270,579  
Projects under construction     4,689       12,208  
     Total investments in properties     428,646       424,366  
Less accumulated depreciation and depletion     65,444       57,208  
     Net investments in properties     363,202       367,158  
                 
Real estate held for investment, at cost     10,510       10,182  
Investments in joint ventures     154,025       140,525  
     Net real estate investments     527,737       517,865  
                 
Cash and cash equivalents     166,028       177,497  
Cash held in escrow     646       797  
Accounts receivable, net     1,683       1,166  
Unrealized rents     1,452       856  
Deferred costs     3,028       2,343  
Other assets     583       560  
Total assets   $ 701,157       701,084  
                 
Liabilities:                
Secured notes payable   $ 178,668       178,557  
Accounts payable and accrued liabilities     3,689       5,971  
Other liabilities     1,886       1,886  
Federal and state income taxes payable     704       18  
Deferred revenue     1,029       259  
Deferred income taxes     67,903       67,960  
Deferred compensation     1,395       1,354  
Tenant security deposits     889       868  
    Total liabilities     256,163       256,873  
                 
Commitments and contingencies                 
                 
Equity:                

Common stock, $.10 par value

25,000,000 shares authorized,

9,477,104 and 9,459,686 shares issued

and outstanding, respectively

    948       946  
Capital in excess of par value     67,168       65,158  
Retained earnings     343,002       342,317  
Accumulated other comprehensive loss, net     (328 )     (1,276 )
     Total shareholders’ equity     410,790       407,145  
Noncontrolling interest     34,204       37,066  
     Total equity     444,994       444,211  
Total liabilities and equity   $ 701,157       701,084  

 

 

 

 

 

 

 

Asset Management Segment:

    Three months ended September 30        
(dollars in thousands)   2023   %   2022   %   Change   %
                         
Lease revenue   $ 1,442       100.0 %     935       100.0 %     507       54.2 %
                                                 
Depreciation, depletion and amortization     369       25.5 %     219       23.4 %     150       68.5 %
Operating expenses     173       12.0 %     162       17.3 %     11       6.8 %
Property taxes     62       4.3 %     53       5.7 %     9       17.0 %
Management company indirect     141       9.8 %     109       11.7 %     32       29.4 %
Corporate expense     177       12.3 %     127       13.6 %     50       39.4 %
                                                 
Cost of operations     922       63.9 %     670       71.7 %     252       37.6 %
                                                 
Operating profit   $ 520       36.1 %     265       28.3 %     255       96.2 %

 

 

 

Mining Royalty Lands Segment:

    Three months ended September 30        
(dollars in thousands)   2023   %   2022   %   Change   %
                         
Mining lands lease revenue   $ 3,082       100.0 %     2,471       100.0 %     611       24.7 %
                                                 
Depreciation, depletion and amortization     138       4.5 %     172       7.0 %     (34     -19.8 %
Operating expenses     18       0.6 %     18       0.7 %     —         0.0 %
Property taxes     181       5.9 %     69       2.8 %     112       162.3 %
Management company indirect     137       4.4 %     129       5.2 %     8       6.2 %
Corporate expense     99       3.2 %     83       3.4 %     16       19.3 %
                                                 
Cost of operations     573       18.6 %     471       19.1 %     102       21.7 %
                                                 
Operating profit   $ 2,509       81.4 %     2,000       80.9 %     509       25.5 %

 

 

 

Development Segment:

    Three months ended September 30  
(dollars in thousands)   2023   2022   Change  
               
Lease revenue   434       412       22    
                           
Depreciation, depletion and amortization     44       47       (3  
Operating expenses     48       250       (202  
Property taxes     121       355       (234 )  
Management company indirect     665       625       40    
Corporate expense     529       457       72    
                           
Cost of operations     1,407       1,734       (327  
                           
Operating loss   $ (973 )     (1,322 )     349    

 

 

 

 

 

Stabilized Joint Venture Segment:

    Three months ended September 30        
(dollars in thousands)   2023   %   2022   %   Change   %
                         
Lease revenue   $ 5,633       100.0 %     5,476       100.0 %     157       2.9 %
                                                 
Depreciation, depletion and amortization     2,265       40.2 %     2,306       42.1 %     (41     -1.8 %
Operating expenses     1,773       31.5 %     1,537       28.1 %     236       15.4 %
Property taxes     555       9.8 %     557       10.2 %     (2     -0.4 %
Management company indirect     116       2.1 %     103       1.9 %     13       12.6 %
Corporate expense     84       1.5 %     67       1.2 %     17       25.4 %
                                                 
Cost of operations     4,793       85.1 %     4,570       83.5 %     223       4.9 %
                                                 
Operating profit   $ 840       14.9 %     906       16.5 %     (66     -7.3 %

 

 

 

 

Asset Management Segment:

    Nine months ended September 30        
(dollars in thousands)   2023   %   2022   %   Change   %
                         
Lease revenue   $ 3,932       100.0 %     2,686       100.0 %     1,246       46.4 %
                                                 
Depreciation, depletion and amortization     1,006       25.6 %     683       25.4 %     323       47.3 %
Operating expenses     490       12.4 %     441       16.4 %     49       11.1 %
Property taxes     185       4.7 %     158       5.9 %     27       17.1 %
Management company indirect     396       10.1 %     301       11.2 %     95       31.6 %
Corporate expense     630       16.0 %     496       18.5 %     134       27.0 %
                                                 
Cost of operations     2,707       68.8 %     2,079       77.4 %     628       30.2 %
                                                 
Operating profit   $ 1,225       31.2 %     607       22.6 %     618       101.8 %

 

 

 

Mining Royalty Lands Segment:

    Nine months ended September 30        
(dollars in thousands)   2023   %   2022   %   Change   %
                         
Mining lands lease revenue   $ 9,628       100.0 %     7,779       100.0 %     1,849       23.8 %
                                                 
Depreciation, depletion and amortization     472       4.9 %     416       5.4 %     56       13.5 %
Operating expenses     51       0.5 %     50       0.6 %     1       2.0 %
Property taxes     324       3.4 %     203       2.6 %     121       59.6 %
Management company indirect     390       4.1 %     346       4.4 %     44       12.7 %
Corporate expense     360       3.7 %     325       4.2 %     35       10.8 %
                                                 
Cost of operations     1,597       16.6 %     1,340       17.2 %     257       19.2 %
                                                 
Operating profit   $ 8,031       83.4 %     6,439       82.8 %     1,592       24.7 %
 

Development Segment:

    Nine months ended September 30  
(dollars in thousands)   2023   2022   Change  
               
Lease revenue   1,387       1,203       184    
                           
Depreciation, depletion and amortization     140       139       1    
Operating expenses     215       541       (326  
Property taxes     587       1,066       (479 )  
Management company indirect     1,822       1,621       201    
Corporate expense     1,918       1,794       124    
                           
Cost of operations     4,682       5,161       (479  
                           
Operating loss   $ (3,295 )     (3,958 )     663    

 

 

 

Stabilized Joint Venture Segment:

    Nine months ended September 30        
(dollars in thousands)   2023   %   2022   %   Change   %
                         
Lease revenue   $ 16,454       100.0 %     15,961       100.0 %     493       3.1 %
                                                 
Depreciation, depletion and amortization     6,797       41.3 %     7,272       45.6 %     (475     -6.5 %
Operating expenses     4,818       29.3 %     4,284       26.9 %     534       12.5 %
Property taxes     1,649       10.0 %     1,676       10.5 %     (27     -1.6 %
Management company indirect     330       2.0 %     277       1.7 %     53       19.1 %
Corporate expense     304       1.9 %     261       1.6 %     43       16.5 %
                                                 
Cost of operations     13,898       84.5 %     13,770       86.3 %     128       0.9 %
                                                 
Operating profit   $ 2,556       15.5 %     2,191       13.7 %     365       16.7 %

 

 

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. We believe these non-GAAP measures provide useful information to our Board of Directors, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, purposes of determining management incentive compensation and budgeting, forecasting and planning purposes. We provide Pro-rata net operating income (NOI) because we believe it assists investors and analysts in estimating our economic interest in our consolidated and unconsolidated partnerships, when read in conjunction with our reported results under GAAP. This measure is not, and should not be viewed as, a substitute for GAAP financial measures.

 

 

 

 

 

Pro-rata Net Operating Income Reconciliation                      
Nine months ended 09/30/23 (in thousands)                      
          Stabilized            
  Asset       Joint   Mining   Unallocated   FRP
  Management   Development   Venture   Royalties   Corporate   Holdings
  Segment   Segment   Segment   Segment   Expenses   Totals
Net Income (loss) 892       (7,192 )     (816 )     5,842       3,270       1,996  
Income Tax Allocation   331       (2,667 )     (145 )     2,168       1,212       899  
Income (loss) before income taxes   1,223       (9,859 )     (961 )     8,010       4,482       2,895  
                                               
Less:                                              
 Unrealized rents   531       —         —         143       —         674  
 Gain on sale of real estate   —         —         —         10       —         10  
 Interest income   —         3,692       —         —         4,515       8,207  
Plus:                                              
 Unrealized rents   —         —         117       —         —         117  
 Loss on sale of real estate   2       —         1       —         —         3  
 Equity in loss of Joint Ventures   —         10,256       298       31       —         10,585  
 Professional fees - other   —         —         59       —         —         59  
 Interest Expense   —         —         3,218       —         33       3,251  
 Depreciation/Amortization   1,006       140       6,797       472       —         8,415  
 Management Co. Indirect   396       1,822       330       390       —         2,938  
 Allocated Corporate Expenses   630       1,918       304       360       —         3,212  
                                               
Net Operating Income   2,726       585       10,163       9,110       —         22,584  
                                               
NOI of noncontrolling interest   —         —         (4,627 )     —         —         (4,627 )
Pro-rata NOI from unconsolidated joint ventures   —         4,054       676       —         —         4,730  
                                               
Pro-rata net operating income $ 2,726       4,639       6,212       9,110       —         22,687  

 

Pro-Rata Net Operating Income Reconciliation                      
Nine months ended 09/30/22 (in thousands)                      
          Stabilized            
  Asset       Joint   Mining   Unallocated   FRP
  Management   Development   Venture   Royalties   Corporate   Holdings
  Segment   Segment   Segment   Segment   Expenses   Totals
Net income (loss)  $ 443       (4,953 )     (166 )     5,311       735       1,370  
Income tax allocation   164       (1,837 )     101       1,969       129       526  
Income (loss) before income taxes   607       (6,790 )     (65 )     7,280       864       1,896  
                                               
Less:                                              
 Unrealized rents   223       —         (62     153       —         314  
 Gain on sale of real estate   —         —         —         874       —         874  
 Interest income   —         2,311       —         —         895       3,206  
Plus:                                              
 Equity in loss of joint ventures   —         5,143       72       33       —         5,248  
 Interest expense   —         —         2,184       —         31       2,215  
 Depreciation/amortization   683       139       7,272       416       —         8,510  
 Management company indirect   301       1,621       277       346       —         2,545  
 Allocated Corporate expenses   496       1,794       261       325       —         2,876  
Net operating income (loss)   1,864       (404     10,063       7,373       —         18,896  
                                               
NOI of noncontrolling interest   —         —         (3,212 )     —         —         (3,212 )
Pro-rata NOI from unconsolidated joint ventures   —         1,896       390       —         —         2,286  
                                               
Pro-rata net operating income  $ 1,864       1,492       7,241       7,373       —         17,970  

 

 

The following tables represent the Joint Venture and Development pro-rata NOI by project:

 

Development Segment:                                                
      FRP       Bryant Street       BC FRP       .408       Verge       Total  
Nine months ended     Portfolio       Partnership       Realty, LLC       Jackson       Partnership       Pro-rata NOI  
9/30/2023     585       3,595       251       350       (142 )     4,639  
9/30/2022     (404 )     1,853       277       (10 )     (224 )     1,492  

 

Stabilized Joint Venture Segment:                                
                      Riverside       Total  
Nine months ended     Dock 79       The Maren       Joint Venture       Pro-rata NOI  
9/30/2023     2,825       2,711       676       6,212  
9/30/2022     3,316       3,535       390       7,241