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FRP Holdings, Inc. (NASDAQ: FRPH) Announces Results for the Second Quarter and Six Months Ended June 30, 2022

·23 min read
FRP Holdings, Inc.
FRP Holdings, Inc.

JACKSONVILLE, Fla., Aug. 11, 2022 (GLOBE NEWSWIRE) -- FRP Holdings, Inc. (NASDAQ-FRPH) –

Second Quarter Operational Highlights

  • Dock 79 ended the reporting period with average residential occupancy above 95% for the fifth straight quarter

  • 7.33% increase on renewals at Dock 79

  • Best second quarter of revenue for mining royalties in segment’s history

  • 55.1% increase in Asset Management Revenue versus same period last year

  • 16.0% increase in NOI ($6.94 million vs $5.98 million) compared to same period last year

Second Quarter Consolidated Results of Operations

Net income for the second quarter of 2022 was $657,000 or $.07 per share versus $82,000 or $.01 per share in the same period last year. The second quarter of 2022 was impacted by the following items:

  • The quarter includes $152,000 amortization expense compared to $1,868,000 in the same quarter last year of the $4,750,000 fair value of The Maren’s leases-in-place established when we booked this asset as part of the gain on remeasurement upon consolidation of this Joint Venture.

  • Interest expense increased $293,000 compared to the same quarter last year due to capitalizing less interest due to the lower amount of in-house and joint venture projects under development.

  • Equity in loss of Joint Ventures increased $648,000 primarily due to increased depreciation and amortization at our joint ventures due to buildings placed in service.

  • The same quarter last year included $805,000 for an easement and sale of excess land in the Mining Royalty Lands Segment.

Second Quarter Segment Operating Results

Asset Management Segment:

Total revenues in this segment were $912,000, up $324,000 or 55.1%, over the same period last year. Operating profit was $194,000, up $354,000 from an operating loss of $(160,000) in the same quarter last year. Operating profit is up primarily because Cranberry Run is now 100% leased and occupied compared to 77.6% leased and 59.7% occupied at the end of the same quarter last year. Revenues are up because of Cranberry Run as well as the addition of our two most recent spec buildings at Hollander Business Park which were under construction during the same period last year.

Mining Royalty Lands Segment:

Total revenues in this segment were $2,883,000 versus $2,634,000 in the same period last year. Total operating profit in this segment was $2,350,000, an increase of $58,000 versus $2,292,000 in the same period last year. This increase is primarily the result of the additional royalties from the acquisition in Astatula, FL which we completed at the beginning of this quarter.

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 in committed capital to the project, $16.8 million in principal draws have taken place to date. Through the end of the first half of 2022, 99 of the 187 units have been sold, and we have received $13,040,000 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 four buildings, The Coda, The Chase 1A, The Chase 1B, and one commercial building 90% leased to an Alamo Draft House movie theater. At quarter end, the Coda was 96.75% leased and 95.45% occupied, The Chase 1B was 85.71% leased and 78.26% occupied, and The Chase 1A was 72.67% leased and 62.79% occupied. In total, at quarter end, Bryant Street’s 487 residential units were 84.6% leased and 78.2% occupied. Its commercial space was 82.5% leased and 69.2% occupied at quarter end.

  • We began construction on our 1800 Half Street joint venture project, now known as The Verge, at the end of August 2020. We expect the building to be complete in the third quarter of 2022. As of the end of the second quarter, the project was 91.34% complete. This is our third mixed use project in the Anacostia waterfront submarket in Washington, DC.

  • Leasing began on Riverside in the third quarter 2021 and the building was 97% leased and 91% occupied at the end of the quarter. .408 Jackson is our second joint venture project in Greenville and is currently under construction. This project is 94.09% complete and we expect to complete construction and begin leasing in fourth quarter of 2022.

Stabilized Joint Venture Segment:

Total revenues in this segment were $5,425,000, an increase of $603,000 versus $4,822,000 in the same period last year. The Maren’s revenue was $2,457,000 and Dock 79 revenues increased $307,000. Total operating profit in this segment was $919,000 an increase of $2,277,000 versus an operating loss of $(1,358,000) in the same period last year. Net Operating Income this quarter for this segment was $3,533,000, up $496,000 or 16.3% compared to the same quarter last year.

At the end of June, The Maren was 93.93% leased and 96.21% occupied. Average residential occupancy for the quarter was 95.34%, and 65.38% of expiring leases renewed with an average rent increase on renewals of 4.60%. The Maren is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 70.41% ownership.

Dock 79’s average residential occupancy for the quarter was 96.39%, and at the end of the quarter, Dock 79’s residential units were 94.8% leased and 94.1% occupied. This quarter, 60.78% of expiring leases renewed with an average rent increase on renewals of 7.33%. Dock 79 is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership.

Second quarter distributions from our CS1031 Hickory Creek DST investment were $86,000.

Six Months Operational Highlights

  • 34.7% increase in asset management revenue versus first six months of last year

  • Highest six-month total of mining royalties revenue in segment’s history

  • 65.52% renewal rate at Dock 79 with 6.41% increase on renewals through first six months

  • 24.0% increase in NOI ($12.67 million vs $10.22 million) compared to first six months last year

Six Months Consolidated Results of Operations

Net income attributable to the Company for the first half of 2022 was $1,329,000 or $.14 per share versus $28,455,000 or $3.03 per share in the same period last year. The first half of 2022 was impacted by the following items:

  • The period includes $468,000 amortization expense compared to $1,868,000 in the same period last year of the $4,750,000 fair value of The Maren’s leases-in-place established when we booked this asset as part of the gain on remeasurement upon consolidation of this Joint Venture.

  • The period includes $733,000 gain on sales of excess property at Brooksville while the same quarter last year included $805,000 for a Grandin easement and sale of Brooksville excess land.

  • Interest income decreased $405,000 due to bond maturities and the repayment of the Company’s preferred interest in The Maren upon the building’s refinancing.

  • Equity in loss of Joint Ventures increased $617,000 primarily due to increased depreciation and amortization at our joint ventures due to buildings placed in service.

Net income for the first half of 2021 included a gain of $51.1 million on the remeasurement of investment in The Maren real estate partnership, which is included in Income before income taxes. This gain on remeasurement was mitigated by a $10.1 million provision for taxes and $14.0 attributable to noncontrolling interest.

Six Months Segment Operating Results

Asset Management Segment:

Total revenues in this segment were $1,751,000, up $451,000 or 34.7%, over the same period last year. Operating profit was $342,000, up $485,000 from an operating loss of $(143,000) in the same period last year.

Mining Royalty Lands Segment:

Total revenues in this segment were $5,308,000 versus $4,949,000 in the same period last year. Total operating profit in this segment was $4,439,000, an increase of $134,000 versus $4,305,000 in the same period last year.

Stabilized Joint Venture Segment:

In March 2021, we reached stabilization on Phase II (The Maren) of the development known as RiverFront on the Anacostia in Washington, D.C. As such, as of March 31, 2021, the Company consolidated the assets (at current fair value based on appraisal), liabilities and operating results of the joint venture. Up through the first quarter of the prior year, accounting for The Maren was reflected in Equity in loss of joint ventures on the Consolidated Statements of Income. Starting April 1, 2021, all the revenue and expenses are accounted for in the same manner as Dock 79 in the stabilized joint venture segment.

Total revenues in this segment were $10,485,000, an increase of $3,154,000 versus $7,331,000 in the same period last year. The Maren’s revenue was $4,866,000 and Dock 79 revenues increased $450,000. Total operating profit in this segment was $1,285,000, an increase of $2,426,000 versus an operating loss of $(1,141,000) in the same period last year. Net Operating Income for this segment was $6,670,000, up $2,099,000 or 45.92% compared to the same period last year. All of these increases over the first six months last year are primarily due to the Maren’s consolidation into this segment in March 31, 2021.

The Maren’s average residential occupancy for the first six months of 2022 was 95.24%, and 63.53% of expiring leases renewed with an average rent increase on renewals of 3.69%. The Maren is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 70.41% ownership.

Dock 79’s average residential occupancy for the first six months of 2022 was 95.79%. Through the first six months of the year, 65.52% of expiring leases renewed with a 6.41% increase on renewals. Dock 79 is a joint venture between the Company and MRP, in which FRP Holdings, Inc. is the majority partner with 66% ownership.

Distributions from our CS1031 Hickory Creek DST investment were $171,000 for the first six months of the year.

Impact of the COVID-19 Pandemic.

We have continued operations throughout the pandemic and have made every effort to act in accordance with national, state, and local regulations and guidelines. During 2020, Dock 79 and The Maren most directly suffered the impacts to our business from the pandemic due to our retail tenants being unable to operate at capacity, the lack of attendance at the Washington Nationals baseball park and the rent freeze imposed by the District. In 2021, the Delta and Omicron variants of the virus impacted our businesses, but because of the vaccine and efforts to reopen the economy, while still affected, they were not impacted to the extent that they were in 2020. It is possible that this version of the virus and its succeeding variants may impact our ability to lease retail spaces in Washington, D.C. and Greenville. We expect our business to be affected by the pandemic for as long as government intervention and regulation is required to combat the threat.

Summary and Outlook

Royalty revenue for the quarter was up 9.44% versus the same period last year and revenue for the first six months increased 7.26% versus the same period the year before. This is the highest second-quarter revenue total in this segment’s history, the highest six-month revenue total in the segment’s history, and the first time we have ever eclipsed $5 million in revenue in the first six months (or any six-month period). As mentioned previously, this jump in revenue is primarily the result of the acquisition we completed at the beginning of this quarter of a new mining royalty property in Astatula, FL. The additional royalties along with increased infrastructure spending and pressure on supply should continue to help push price and volumes and drive this segment forward.

This is the first full quarter where we have had the ability raise to rents on renewals at Dock 79 and the Maren. Both properties performed well with 65.38% of expiring leases at the Maren renewing with an average increase of 4.60%, and 60.78% of expiring leases at Dock 79 renewing with an average increase of 7.33%.   When we could not renew an existing residential lease and instead signed a new tenant, we saw a year-to-date increase in rent on these “trade-outs” of 11.75% at Dock 79 and 10.58% at The Maren.    Dock 79 experienced the effects of the rent freeze to a greater extent than the Maren, so it is not surprising that a return to market rents has had a greater effect on its renewal increases as well as these trade-outs. Increased inflation has also played a part in driving these increases. However, we believe that this also speaks to the demand these assets generate in a competitive market and confirms our “long” position in this submarket with these assets as well as the ones we have in our development pipeline.

Demand for industrial space remains high and Asset Management’s performance this quarter speaks to that. Cranberry Run is 100% leased and occupied for the second straight quarter and as a result achieved first six-month revenues 34.19% higher than last year.    Our other two properties (our home office in Maryland and Vulcan’s former Jacksonville office) remain essentially unchanged and fully leased. As to the immediate future of this segment, we anticipate shell completion of our final building at Hollander by the end of 2022. This 101,750 square foot warehouse is a build-to-suit with a 10-year lease, which will positively impact revenue, operating profit, and NOI for some time.
  
Looking back on the first six months, the numbers speak to both organic growth in all our income producing segments as well as the benefit of two full quarters of a stabilized and consolidated Maren. The one major headwind in our income statement is the increase in equity in loss in joint venture. This is both a function of the equity method of accounting and the nature of our multifamily assets prior to stabilization. What one line item encompassing several properties simply cannot tell you, and perhaps where an NOI number is more illustrative, is how we are incrementally growing the value of this Company. Development and lease-up are always going to be expensive and a damper on earnings, and, good, bad, or indifferent, are simply the price you pay for future income and cashflow. We count ourselves extremely fortunate to have a shareholder base that can see the big picture and understands what we are building towards.

We have several meaningful events and milestones heading our way with what remains of the year: the stabilization of both Bryant Street; stabilization and permanent financing for Riverside; completion of construction on and the commencement of leasing for both .408 Jackson in Greenville and The Verge in Washington, DC. We are working diligently to conservatively convert our existing cash into new investments, cautiously optimistic as ever, but ever mindful of our duty to be responsible stewards of your capital.

Conference Call

The Company will host a conference call on Friday, August 12, 2022 at 10:00 a.m. (EDT). Analysts, stockholders and other interested parties may access the teleconference live by calling 1-800-343-4849 (passcode 91003) within the United States. International callers may dial 1-203-518-9848 (passcode 91003). Audio replay will be available until August 26, 2022 by dialing 1-800-943-2127 (passcode 17717) within the United States. International callers may dial 1-402-220-1139 (passcode 17717). 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 impact of the COVID-19 Pandemic on our operations and financial results; 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., Richmond, Virginia, 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 a residential apartment building.

FRP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share amounts)
(Unaudited)

 

 

THREE MONTHS ENDED

 

SIX MONTHS ENDED

 

 

JUNE 30,

 

JUNE 30,

 

 

2022

 

2021

 

2022

 

2021

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease revenue

 

$

6,745

 

 

 

5,861

 

 

 

13,027

 

 

 

9,399

 

Mining lands lease revenue

 

 

2,883

 

 

 

2,634

 

 

 

5,308

 

 

 

4,949

 

Total Revenues

 

 

9,628

 

 

 

8,495

 

 

 

18,335

 

 

 

14,348

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

2,868

 

 

 

4,388

 

 

 

5,766

 

 

 

5,831

 

Operating expenses

 

 

1,541

 

 

 

1,394

 

 

 

3,349

 

 

 

2,235

 

Property taxes

 

 

1,041

 

 

 

1,000

 

 

 

2,069

 

 

 

1,778

 

Management company indirect

 

 

805

 

 

 

822

 

 

 

1,579

 

 

 

1,392

 

Corporate expenses

 

 

1,307

 

 

 

1,050

 

 

 

2,142

 

 

 

1,829

 

Total cost of operations

 

 

7,562

 

 

 

8,654

 

 

 

14,905

 

 

 

13,065

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating profit (loss)

 

 

2,066

 

 

 

(159

)

 

 

3,430

 

 

 

1,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income, including realized gains of $0, $0, $0 and $0, respectively

 

 

1,120

 

 

 

1,048

 

 

 

2,018

 

 

 

2,423

 

Interest expense

 

 

(739

)

 

 

(446

)

 

 

(1,477

)

 

 

(1,371

)

Equity in loss of joint ventures

 

 

(1,766

)

 

 

(1,118

)

 

 

(3,370

)

 

 

(2,753

)

Gain on remeasurement of investment in real estate partnership

 

 

 

 

 

 

 

 

 

 

 

51,139

 

Gain on sale of real estate

 

 

 

 

 

805

 

 

 

733

 

 

 

805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

681

 

 

 

130

 

 

 

1,334

 

 

 

51,526

 

Provision for (benefit from) income taxes

 

 

99

 

 

 

(151

)

 

 

348

 

 

 

10,370

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

582

 

 

 

281

 

 

 

986

 

 

 

41,156

 

Gain (loss) attributable to noncontrolling interest

 

 

(75

)

 

 

199

 

 

 

(343

)

 

 

12,701

 

Net income attributable to the Company

 

$

657

 

 

 

82

 

 

 

1,329

 

 

 

28,455

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to the Company-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.07

 

 

 

0.01

 

 

 

0.14

 

 

 

3.04

 

Diluted

 

$

0.07

 

 

 

0.01

 

 

 

0.14

 

 

 

3.03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of shares (in thousands) used in computing:

 

 

 

 

 

 

 

 

 

 

 

-basic earnings per common share

 

 

9,384

 

 

 

9,353

 

 

 

9,375

 

 

 

9,347

 

-diluted earnings per common share

 

 

9,424

 

 

 

9,390

 

 

 

9,416

 

 

 

9,385

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FRP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In thousands, except share data)

 

 

June 30, 2022

 

December 31, 2021

Assets:

 

 

 

 

Real estate investments at cost:

 

 

 

 

 

 

 

 

Land

 

$

135,139

 

 

 

123,397

 

Buildings and improvements

 

 

268,156

 

 

 

265,278

 

Projects under construction

 

 

11,149

 

 

 

8,668

 

Total investments in properties

 

 

414,444

 

 

 

397,343

 

Less accumulated depreciation and depletion

 

 

51,889

 

 

 

46,678

 

Net investments in properties

 

 

362,555

 

 

 

350,665

 

 

 

 

 

 

 

 

 

 

Real estate held for investment, at cost

 

 

9,969

 

 

 

9,722

 

Investments in joint ventures

 

 

139,655

 

 

 

145,443

 

Net real estate investments

 

 

512,179

 

 

 

505,830

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

159,262

 

 

 

161,521

 

Cash held in escrow

 

 

765

 

 

 

752

 

Accounts receivable, net

 

 

1,423

 

 

 

793

 

Investments available for sale at fair value

 

 

 

 

 

4,317

 

Federal and state income taxes receivable

 

 

 

 

 

1,103

 

Unrealized rents

 

 

806

 

 

 

620

 

Deferred costs

 

 

2,065

 

 

 

2,726

 

Other assets

 

 

540

 

 

 

528

 

Total assets

 

$

677,040

 

 

 

678,190

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Secured notes payable

 

$

178,483

 

 

 

178,409

 

Accounts payable and accrued liabilities

 

 

4,815

 

 

 

6,137

 

Other liabilities

 

 

1,886

 

 

 

1,886

 

Federal and state income taxes payable

 

 

398

 

 

 

 

Deferred revenue

 

 

223

 

 

 

369

 

Deferred income taxes

 

 

64,180

 

 

 

64,047

 

Deferred compensation

 

 

1,307

 

 

 

1,302

 

Tenant security deposits

 

 

811

 

 

 

790

 

Total liabilities

 

 

252,103

 

 

 

252,940

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Common stock, $.10 par value 25,000,000 shares authorized, 9,455,096 and 9,411,028 shares issued and outstanding, respectively

 

 

945

 

 

 

941

 

Capital in excess of par value

 

 

58,872

 

 

 

57,617

 

Retained earnings

 

 

339,081

 

 

 

337,752

 

Accumulated other comprehensive income (loss), net

 

 

(1,096

)

 

 

113

 

Total shareholders’ equity

 

 

397,802

 

 

 

396,423

 

Noncontrolling interest MRP

 

 

27,135

 

 

 

28,827

 

Total equity

 

 

424,937

 

 

 

425,250

 

Total liabilities and equity

 

$

677,040

 

 

 

678,190

 

 

 

 

 

 

 

 

 

 

Asset Management Segment:

 

 

Three months ended June 30

 

 

 

 

(dollars in thousands)

 

2022

 

%

 

2021

 

%

 

Change

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease revenue

 

$

912

 

 

 

100.0

%

 

 

588

 

 

 

100.0

%

 

 

324

 

 

 

55.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

230

 

 

 

25.2

%

 

 

134

 

 

 

22.8

%

 

 

96

 

 

 

71.6

%

Operating expenses

 

 

111

 

 

 

12.2

%

 

 

74

 

 

 

12.6

%

 

 

37

 

 

 

50.0

%

Property taxes

 

 

52

 

 

 

5.7

%

 

 

42

 

 

 

7.1

%

 

 

10

 

 

 

23.8

%

Management company indirect

 

 

100

 

 

 

10.9

%

 

 

210

 

 

 

35.7

%

 

 

(110

)

 

 

-52.4

%

Corporate expense

 

 

225

 

 

 

24.7

%

 

 

288

 

 

 

49.0

%

 

 

(63

)

 

 

-21.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of operations

 

 

718

 

 

 

78.7

%

 

 

748

 

 

 

127.2

%

 

 

(30

)

 

 

-4.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit (loss)

 

$

194

 

 

 

21.3

%

 

 

(160

)

 

 

-27.2

%

 

 

354

 

 

 

-221.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mining Royalty Lands Segment:

 

 

Three months ended June 30

 

 

 

 

(dollars in thousands)

 

2022

 

%

 

2021

 

%

 

Change

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Mining lands lease revenue

 

$

2,883

 

 

 

100.0

%

 

 

2,634

 

 

 

100.0

%

 

 

249

 

 

 

9.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

189

 

 

 

6.6

%

 

 

58

 

 

 

2.2

%

 

 

131

 

 

 

225.9

%

Operating expenses

 

 

17

 

 

 

0.6

%

 

 

12

 

 

 

0.5

%

 

 

5

 

 

 

41.7

%

Property taxes

 

 

69

 

 

 

2.4

%

 

 

68

 

 

 

2.6

%

 

 

1

 

 

 

1.5

%

Management company indirect

 

 

110

 

 

 

3.8

%

 

 

96

 

 

 

3.6

%

 

 

14

 

 

 

14.6

%

Corporate expense

 

 

148

 

 

 

5.1

%

 

 

108

 

 

 

4.1

%

 

 

40

 

 

 

37.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of operations

 

 

533

 

 

 

18.5

%

 

 

342

 

 

 

13.0

%

 

 

191

 

 

 

55.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

$

2,350

 

 

 

81.5

%

 

 

2,292

 

 

 

87.0

%

 

 

58

 

 

 

2.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development Segment:

 

 

Three months ended June 30

(dollars in thousands)

 

2022

 

2021

 

Change

 

 

 

 

 

 

 

Lease revenue

 

$

408

 

 

 

451

 

 

 

(43

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

47

 

 

 

53

 

 

 

(6

)

Operating expenses

 

 

80

 

 

 

45

 

 

 

35

 

Property taxes

 

 

356

 

 

 

364

 

 

 

(8

)

Management company indirect

 

 

506

 

 

 

400

 

 

 

106

 

Corporate expense

 

 

816

 

 

 

522

 

 

 

294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of operations

 

 

1,805

 

 

 

1,384

 

 

 

421

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

$

(1,397

)

 

 

(933

)

 

 

(464

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stabilized Joint Venture Segment:

 

 

Three months ended June 30

 

 

 

 

(dollars in thousands)

 

2022

 

%

 

2021

 

%

 

Change

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease revenue

 

$

5,425

 

 

 

100.0

%

 

 

4,822

 

 

 

100.0

%

 

 

603

 

 

 

12.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

2,402

 

 

 

44.3

%

 

 

4,143

 

 

 

85.9

%

 

 

(1,741

)

 

 

-42.0

%

Operating expenses

 

 

1,333

 

 

 

24.6

%

 

 

1,263

 

 

 

26.2

%

 

 

70

 

 

 

5.5

%

Property taxes

 

 

564

 

 

 

10.4

%

 

 

526

 

 

 

10.9

%

 

 

38

 

 

 

7.2

%

Management company indirect

 

 

89

 

 

 

1.6

%

 

 

116

 

 

 

2.4

%

 

 

(27

)

 

 

-23.3

%

Corporate expense

 

 

118

 

 

 

2.2

%

 

 

132

 

 

 

2.8

%

 

 

(14

)

 

 

-10.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of operations

 

 

4,506

 

 

 

83.1

%

 

 

6,180

 

 

 

128.2

%

 

 

(1,674

)

 

 

-27.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit (loss)

 

$

919

 

 

 

16.9

%

 

 

(1,358

)

 

 

-28.2

%

 

 

2,277

 

 

 

-167.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Management Segment:

 

 

Six months ended June 30

 

 

 

 

(dollars in thousands)

 

2022

 

%

 

2021

 

%

 

Change

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease revenue

 

$

1,751

 

 

 

100.0

%

 

 

1,300

 

 

 

100.0

%

 

 

451

 

 

 

34.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

464

 

 

 

26.5

%

 

 

271

 

 

 

20.8

%

 

 

193

 

 

 

71.2

%

Operating expenses

 

 

279

 

 

 

15.9

%

 

 

213

 

 

 

16.4

%

 

 

66

 

 

 

31.0

%

Property taxes

 

 

105

 

 

 

6.0

%

 

 

80

 

 

 

6.2

%

 

 

25

 

 

 

31.3

%

Management company indirect

 

 

192

 

 

 

11.0

%

 

 

377

 

 

 

29.0

%

 

 

(185

)

 

 

-49.1

%

Corporate expense

 

 

369

 

 

 

21.1

%

 

 

502

 

 

 

38.6

%

 

 

(133

)

 

 

-26.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of operations

 

 

1,409

 

 

 

80.5

%

 

 

1,443

 

 

 

111.0

%

 

 

(34

)

 

 

-2.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit (loss)

 

$

342

 

 

 

19.5

%

 

 

(143

)

 

 

-11.0

%

 

 

485

 

 

 

-339.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mining Royalty Lands Segment:

 

 

Six months ended June 30

 

 

 

 

(dollars in thousands)

 

2022

 

%

 

2021

 

%

 

Change

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Mining lands lease revenue

 

$

5,308

 

 

 

100.0

%

 

 

4,949

 

 

 

100.0

%

 

 

359

 

 

 

7.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

244

 

 

 

4.6

%

 

 

123

 

 

 

2.5

%

 

 

121

 

 

 

98.4

%

Operating expenses

 

 

32

 

 

 

0.6

%

 

 

23

 

 

 

0.5

%

 

 

9

 

 

 

39.1

%

Property taxes

 

 

134

 

 

 

2.5

%

 

 

131

 

 

 

2.6

%

 

 

3

 

 

 

2.3

%

Management company indirect

 

 

217

 

 

 

4.1

%

 

 

178

 

 

 

3.6

%

 

 

39

 

 

 

21.9

%

Corporate expense

 

 

242

 

 

 

4.6

%

 

 

189

 

 

 

3.8

%

 

 

53

 

 

 

28.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of operations

 

 

869

 

 

 

16.4

%

 

 

644

 

 

 

13.0

%

 

 

225

 

 

 

34.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

 

$

4,439

 

 

 

83.6

%

 

 

4,305

 

 

 

87.0

%

 

 

134

 

 

 

3.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Development Segment:

 

 

Six months ended June 30

(dollars in thousands)

 

2022

 

2021

 

Change

 

 

 

 

 

 

 

Lease revenue

 

$

791

 

 

 

768

 

 

 

23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

92

 

 

 

106

 

 

 

(14

)

Operating expenses

 

 

291

 

 

 

71

 

 

 

220

 

Property taxes

 

 

711

 

 

 

727

 

 

 

(16

)

Management company indirect

 

 

996

 

 

 

661

 

 

 

335

 

Corporate expense

 

 

1,337

 

 

 

941

 

 

 

396

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of operations

 

 

3,427

 

 

 

2,506

 

 

 

921

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

 

$

(2,636

)

 

 

(1,738

)

 

 

(898

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Stabilized Joint Venture Segment:

 

 

Six months ended June 30

 

 

 

 

(dollars in thousands)

 

2022

 

%

 

2021

 

%

 

Change

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease revenue

 

$

10,485

 

 

 

100.0

%

 

 

7,331

 

 

 

100.0

%

 

 

3,154

 

 

 

43.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

4,966

 

 

 

47.4

%

 

 

5,331

 

 

 

72.7

%

 

 

(365

)

 

 

-6.8

%

Operating expenses

 

 

2,747

 

 

 

26.2

%

 

 

1,928

 

 

 

26.3

%

 

 

819

 

 

 

42.5

%

Property taxes

 

 

1,119

 

 

 

10.7

%

 

 

840

 

 

 

11.5

%

 

 

279

 

 

 

33.2

%

Management company indirect

 

 

174

 

 

 

1.6

%

 

 

176

 

 

 

2.4

%

 

 

(2

)

 

 

-1.1

%

Corporate expense

 

 

194

 

 

 

1.8

%

 

 

197

 

 

 

2.7

%

 

 

(3

)

 

 

-1.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of operations

 

 

9,200

 

 

 

87.7

%

 

 

8,472

 

 

 

115.6

%

 

 

728

 

 

 

8.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit (loss)

 

$

1,285

 

 

 

12.3

%

 

 

(1,141

)

 

 

-15.6

%

 

 

2,426

 

 

 

-212.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Measures.

To supplement the financial results presented in accordance with GAAP, FRP presents certain non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. The non-GAAP financial measure included in this quarterly report is net operating income (NOI). FRP uses this non-GAAP financial measure to analyze its operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. This measure is not, and should not be viewed as, a substitute for GAAP financial measures.

Net Operating Income Reconciliation

 

 

 

 

 

 

 

 

 

 

 

Six months ended 06/30/22 (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stabilized

 

 

 

 

 

 

 

Asset

 

 

 

Joint

 

Mining

 

Unallocated

 

FRP

 

Management

 

Development

 

Venture

 

Royalties

 

Corporate

 

Holdings

 

Segment

 

Segment

 

Segment

 

Segment

 

Expenses

 

Totals

Net Income (loss)

$

249

 

 

 

(3,351

)

 

 

(92

)

 

 

3,758

 

 

 

422

 

 

 

986

 

Income Tax Allocation

 

93

 

 

 

(1,242

)

 

 

92

 

 

 

1,393

 

 

 

12

 

 

 

348

 

Income (loss) before income taxes

 

342

 

 

 

(4,593

)

 

 

 

 

 

5,151

 

 

 

434

 

 

 

1,334

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized rents

 

196

 

 

 

 

 

 

 

 

 

105

 

 

 

 

 

 

301

 

Gain on sale of real estate

 

 

 

 

 

 

 

 

 

 

733

 

 

 

 

 

 

733

 

Equity in gain of Joint Ventures

 

 

 

 

 

 

 

171

 

 

 

 

 

 

 

 

 

171

 

Interest income

 

 

 

 

1,563

 

 

 

 

 

 

 

 

 

455

 

 

 

2,018

 

Plus:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized rents

 

 

 

 

 

 

 

51

 

 

 

 

 

 

 

 

 

51

 

Equity in loss of Joint Ventures

 

 

 

 

3,520

 

 

 

 

 

 

21

 

 

 

 

 

 

3,541

 

Interest Expense

 

 

 

 

 

 

 

1,456

 

 

 

 

 

 

21

 

 

 

1,477

 

Depreciation/Amortization

 

464

 

 

 

92

 

 

 

4,966

 

 

 

244

 

 

 

 

 

 

5,766

 

Management Co. Indirect

 

192

 

 

 

996

 

 

 

174

 

 

 

217

 

 

 

 

 

 

1,579

 

Allocated Corporate Expenses

 

369

 

 

 

1,337

 

 

 

194

 

 

 

242

 

 

 

 

 

 

2,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Operating Income (loss)

$

1,171

 

 

 

(211

)

 

 

6,670

 

 

 

5,037

 

 

 

 

 

 

12,667

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Net Operating Income Reconciliation

 

 

 

 

 

 

 

 

 

 

 

Six months ended 06/30/21 (in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stabilized

 

 

 

 

 

 

 

Asset

 

 

 

Joint

 

Mining

 

Unallocated

 

FRP

 

Management

 

Development

 

Venture

 

Royalties

 

Corporate

 

Holdings

 

Segment

 

Segment

 

Segment

 

Segment

 

Expenses

 

Totals

Net Income (loss)

$

(123

)

 

 

(1,629

)

 

 

38,591

 

 

 

3,731

 

 

 

586

 

 

 

41,156

 

Income Tax Allocation

 

(46

)

 

 

(604

)

 

 

9,601

 

 

 

1,383

 

 

 

36

 

 

 

10,370

 

Income (loss) before income taxes

 

(169

)

 

 

(2,233

)

 

 

48,192

 

 

 

5,114

 

 

 

622

 

 

 

51,526

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on remeasurement of real estate investment

 

 

 

 

 

 

 

51,139

 

 

 

 

 

 

 

 

 

51,139

 

Gain on investment land sold

 

 

 

 

 

 

 

 

 

 

831

 

 

 

 

 

 

831

 

Unrealized rents

 

11

 

 

 

 

 

 

 

 

 

113

 

 

 

 

 

 

124

 

Interest income

 

 

 

 

1,779

 

 

 

 

 

 

 

 

 

644

 

 

 

2,423

 

Plus:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized rents

 

 

 

 

 

 

 

8

 

 

 

 

 

 

 

 

 

8

 

Loss on sale of land

 

26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

26

 

Equity in loss of Joint Venture

 

 

 

 

2,274

 

 

 

457

 

 

 

22

 

 

 

 

 

 

2,753

 

Interest Expense

 

 

 

 

 

 

 

1,349

 

 

 

 

 

 

22

 

 

 

1,371

 

Depreciation/Amortization

 

271

 

 

 

106

 

 

 

5,331

 

 

 

123

 

 

 

 

 

 

5,831

 

Management Co. Indirect

 

377

 

 

 

661

 

 

 

176

 

 

 

178

 

 

 

 

 

 

1,392

 

Allocated Corporate Expenses

 

502

 

 

 

941

 

 

 

197

 

 

 

189

 

 

 

 

 

 

1,829

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Operating Income (loss)

$

996

 

 

 

(30

)

 

 

4,571

 

 

 

4,682

 

 

 

 

 

 

10,219

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONTACT: Contact: John D. Baker III Chief Financial Officer 904/858-9100