FRPH FRP Holdings Inc

JACKSONVILLE, Fla., May 8 /PRNewswire-FirstCall/ -- Patriot Transportation Holding, Inc. (NASDAQ:PATR) reported net income of $626,000 or $0.20 per diluted share in the second quarter of fiscal 2008, a decrease of $1,971,000 compared to net income of $2,597,000 or $0.83 per diluted share in the same period last year. Net income for the first six months of fiscal 2008 was $2,031,000 or $0.65 per diluted share, a decrease of $2,726,000 compared to net income of $4,757,000 or $1.53 per diluted share for the same period last year. Net income for the first six months of fiscal 2008 benefited from a gain on condemnation of land of $1,544,000, net of income taxes but was adversely impacted by the accrual of retirement benefits of $1,541,000, net of income tax benefits, for the Company's previous President and CEO, whose retirement was effective February 6, 2008. The transportation segment was negatively impacted in the first six months of fiscal 2008 from continuing adverse demand, fuel expense and operating disruptions for the flatbed trucking operations. The first six months of fiscal 2007 benefited from gains on equipment sales and prior period insurance recoveries. Second Quarter Operating Results. For the second quarter of fiscal 2008, consolidated revenues were $41,088,000, an increase of $2,932,000 or 7.7% over the same quarter last year. Transportation segment revenues were $34,738,000 in the second quarter of 2008, an increase of $2,150,000 over the same quarter last year primarily due to fuel surcharges. Excluding fuel surcharges, revenue per mile increased 3.2% over the same quarter last year. Decreased construction material freight demand and pricing softness from the downturn in housing pushed revenues down in the flatbed operation compared to the same quarter last year. Revenue miles in the current quarter were down 3.7% compared to the second quarter of 2007 due to reduced loads in the flatbed portion of the transportation segment. Real Estate segment revenues for the second quarter of fiscal 2008 were $6,350,000, an increase of $782,000 or 14.0% over the same quarter last year. Lease revenue from developed properties increased $307,000 or 7.6%, due to an increase in occupied square footage, higher rental rates on new leases, and increased revenue from reimbursed real estate taxes. Royalties and rent increased $475,000 or 31.1% despite reduced tons mined because of an increase of $54,000 in revenues from timber harvesting, revenue of $262,000 for reimbursement of higher real estate taxes, and increases in minimum rent requirements effective in August 2007 and October 2007 pursuant to terms contained in several mining leases. Consolidated gross profit was $6,053,000 in the second quarter of fiscal 2008, a decrease of $2,370,000 or 28.1% compared to $8,423,000 in the same period last year. Gross profit in the transportation segment decreased $2,373,000 or 42.5% due to increases in cost of operations along with decreased freight demand, resulting in reduced revenue miles and lower pricing in the flatbed portion. Average fuel cost per gallon in the second quarter of 2008 increased 43% over the same period last year. This resulted in an increase in fuel cost of $331,000 in excess of the increase in fuel surcharge revenue in the flatbed portion. Insurance and losses increased $1,182,000 primarily due the same quarter last year including a reduction of expense for changes in estimated prior year retained loss reserves as of March 31, 2007 versus estimates as of September 30, 2006 as calculated by a third-party actuary. Other expense increased $670,000 due to $295,000 higher gains on equipment sales the same quarter last year along with an increase of $344,000 in vehicle tires and maintenance. Gross profit in the real estate segment increased $3,000 or 0.1% from the second quarter 2007, due to higher rental rates on new leases, $54,000 increased gross profit from timber harvesting offset by increased real estate taxes that could not be billed to tenants. Selling, general and administrative expenses increased $450,000 over the same quarter last year. The current quarter includes $132,000 accrual of retirement benefits for the Company's previous President and CEO. Estimated allowance for doubtful accounts expense increased $85,000 primarily due to inclusion in the prior year of a reversal of prior accruals. Audit and legal fees increased $93,000 due to various projects. Stock compensation expense excluding amounts associated with the Company's prior President and CEO decreased $66,000. During the quarter a corporate aircraft was purchased increasing expense $62,000. Donations increased $65,000 due to donations made earlier than the same donations were made in the prior year. Payroll taxes increased $44,000 due to stock option exercises. Six Months Operating Results. For the first six months of fiscal 2008, consolidated revenues were $80,288,000, an increase of $5,008,000 or 6.7% over the same period last year. Transportation segment revenues were $67,657,000 in the first six months of 2008, an increase of $3,345,000 over the same period last year primarily due to fuel surcharges. Excluding fuel surcharges, revenue per mile increased 2.6% over the same period last year. Decreased construction material freight demand and pricing softness from the downturn in housing pushed revenues down in the flatbed operation compared to the same period last year. Revenue miles in the first six months of fiscal 2008 were down 3.4% compared to the first six months of fiscal 2007 due to reduced loads in the flatbed portion of the transportation segment. Real Estate segment revenues for the first six months of fiscal 2008 were $12,631,000, an increase of $1,663,000 or 15.2% over the same period last year. Lease revenue from developed properties increased $814,000 or 10.4%, due to an increase in occupied square footage along with higher rental rates on new leases. Royalties and rent increased $849,000 or 27.1% despite reduced tons mined because of an increase of $365,000 in revenues from timber harvesting, revenue of $262,000 for reimbursement of higher real estate taxes, and increases in minimum rent requirements effective in August 2007 and October 2007 pursuant to terms contained in several mining leases. Consolidated gross profit was $12,276,000 in the first six months of fiscal 2008, a decrease of $3,606,000 or 22.7% compared to $15,882,000 in the same period last year. Gross profit in the transportation segment decreased $4,185,000 or 41.1% due to increases in cost of operations along with decreased freight demand, resulting in reduced revenue miles and lower pricing in the flatbed portion. Average fuel cost per gallon in the first six months of 2008 increased 38% over the same period last year. This resulted in an increase in fuel cost of $611,000 in excess of the increase in fuel surcharge revenue in the flatbed portion. Insurance and losses increased $1,580,000 primarily due to the same period last year including a reduction of expense for changes in estimated prior year retained loss reserves as of March 31, 2007 versus estimates as of September 30, 2006 as calculated by a third-party actuary along with a $357,000 of prior year insurance costs recorded in the three months ended December 31, 2006. Other expense increased $1,219,000 due to $750,000 higher gains on equipment sales over the same period last year along with an increase of $501,000 in vehicle tires and maintenance. Gross profit in the real estate segment increased $579,000 or 10.1% from the first six months 2007, due to higher rental rates on new leases, $365,000 increased gross profit from timber harvesting offset by increased real estate taxes that could not be billed to tenants. Selling, general and administrative expenses increased $2,779,000 over the same period last year. The current year includes $2,503,000 accrual of retirement benefits for the Company's previous President and Chief Executive Officer. Estimated allowance for doubtful accounts expense increased $89,000 primarily due to the inclusion in prior year of a reversal of prior accruals. Audit and legal fees increased $100,000 due to various projects. Stock compensation expense excluding amounts associated with the Company's prior President and CEO decreased $97,000. During the quarter a corporate aircraft was purchased increasing expense $62,000. Donations increased $65,000 due to donations made earlier than the same donations were made in the prior year. Payroll taxes increased $45,000 due to stock option exercises. Summary and Outlook. The flatbed portion of the transportation segment continues to face severe industry over capacity and significant disruptions to profitability from poor freight demand, utilization disruption and pricing softness resulting from the housing downturn as well as high fuel expenses. This downturn is expected to continue to impact the operations of the flatbed portion of our transportation business throughout calendar 2008. The Company's real estate development business continues to expand its portfolio of warehouse-office products consistent with maintaining a watchful eye on national and regional economic health. The Company is evaluating alternative proposals from residential developers in an effort to obtain a Planned Unit Development and Record Plat along with the eventual disposition of the 62 developable acre residential portion of Windlass Run, located in southeastern Baltimore County, Maryland. The Company has a rezoning application before the Zoning Commission of the District of Columbia for its 5.8 acre undeveloped site currently leased on the Anacostia River in Washington, D.C. This tract is adjacent to the new Washington Nationals Baseball Stadium. If the rezoning application is granted, the Company would be permitted to develop up to 545,800 square feet of commercial use and an additional 569,600 square feet for residential use. At a March 20, 2008 hearing, the Company received approval for Proposed Action subject to a review by the National Capital Planning Commission (NCPC) and final approval by the Zoning Commission. The NCPC reviewed the proposed development plan at its meeting on May 1, 2008 and agreed that the proposed project was not inconsistent with the Federal interests there by finding no objection to the Zoning Commission taking Final Action to approve the zoning application at a meeting expected in the third or fourth quarter of Fiscal year 2008. 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 general economic conditions; competitive factors; political, economic, regulatory and climatic conditions; driver availability and cost; the impact of future regulations regarding the transportation industry; freight demand for petroleum product and levels of construction activity in the Company's markets; fuel costs; risk insurance markets; demand for flexible warehouse/office facilities; ability to obtain zoning and entitlements necessary for property development; interest rates; levels of mining activity; pricing; energy costs and technological changes. Additional information regarding these and other risk factors and uncertainties may be found in the Company's filings with the Securities and Exchange Commission. Patriot Transportation Holding, Inc. is engaged in the transportation and real estate businesses. The Company's transportation business is conducted through two wholly owned subsidiaries. Florida Rock & Tank Lines, Inc. is a Southeastern transportation company concentrating in the hauling by motor carrier of liquid and dry bulk commodities. SunBelt Transport, Inc. serves the flatbed portion of the trucking industry in the Southeastern states, hauling primarily construction materials. The Company's real estate group, comprised of FRP Development Corp. and Florida Rock Properties, Inc., acquires, constructs, leases, operates and manages land and buildings to generate both current cash flows and long-term capital appreciation. The real estate group also owns real estate which is leased under mining royalty agreements or held for investment. PATRIOT TRANSPORTATION HOLDING, INC. Summary of Consolidated Revenues and Earnings (unaudited) (In thousands except per share amounts) Three Months Six Months Ended Ended March 31 March 31 2008 2007 2008 2007 Revenues $ 41,088 38,156 $ 80,288 75,280 Gross profit $ 6,053 8,423 $ 12,276 15,882 Income before income taxes $ 1,192 4,261 $ 3,471 7,803 Net income $ 626 2,597 $ 2,031 4,757 Earnings per common share: Basic $0.21 0.86 $0.67 1.58 Diluted $0.20 0.83 $0.65 1.53 Weighted average common shares outstanding: Basic 3,037 3,017 3,039 3,007 Diluted 3,128 3,125 3,138 3,117 PATRIOT TRANSPORTATION HOLDING, INC. Condensed Balance Sheets (unaudited) (Amounts in thousands) March 31 September 30 2008 2007 Cash and cash equivalents $ 8,428 $ 26,944 Accounts receivable, net 12,154 10,983 Other current assets 13,177 6,559 Property, plant and equipment, net 202,783 192,523 Investment in Brooksville Joint Venture 6,238 5,904 Other non-current assets 9,977 10,617 Total Assets $ 252,757 $ 253,530 Current liabilities $ 20,663 $ 20,228 Long-term debt (excluding current 78,196 80,172 maturities) Deferred income taxes 17,154 15,274 Other non-current liabilities 6,148 7,395 Shareholders' equity 130,596 130,461 Total Liabilities and Shareholders' Equity $ 252,757 $ 253,530 PATRIOT TRANSPORTATION HOLDING, INC. Business Segments (unaudited) (Amounts in thousands) The Company has identified two business segments, Transportation and Real Estate, each of which is managed separately along product lines. All of the Company's operations are located in the Southeastern and Mid-Atlantic states. Operating results for the Company's business segments are as follows: Three Months Ended Six Months Ended March 31 March 31 2008 2007 2008 2007 Transportation Revenues $ 34,738 32,588 $ 67,657 64,312 Real Estate Revenues 6,350 5,568 12,631 10,968 Total Revenues $ 41,088 38,156 $ 80,288 75,280 Transportation Operating Profit $ 976 3,440 $ 1,622 5,852 Real Estate Operating Profit 2,848 2,845 6,288 5,709 Corporate Expenses (1,426) (1,067) (4,676) (1,942) Total Operating Profit $ 2,398 5,218 $ 3,234 9.619 DATASOURCE: Patriot Transportation Holding, Inc. CONTACT: John D. Baker II, Chief Executive Officer of Patriot Transportation Holding, Inc., +1-904-396-5733

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