FRP (FRPH) - 2025 Q2 - Quarterly Report

Part I. Financial Information This section presents the company's unaudited consolidated financial statements, management's discussion, market risks, and internal controls Item 1. Financial Statements This section presents the unaudited consolidated financial statements for FRP Holdings, Inc. as of June 30, 2025, including balance sheets, income statements, cash flows, and detailed notes Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $722,782 | $728,485 | | Cash and cash equivalents | $153,167 | $148,620 | | Net real estate investments | $562,149 | $573,060 | | Investments in joint ventures | $139,098 | $153,899 | | Total Liabilities | $261,368 | $259,372 | | Secured notes payable | $180,371 | $178,853 | | Total Equity | $461,414 | $469,113 | - Total assets decreased slightly from $728.5 million at year-end 2024 to $722.8 million as of June 30, 2025, mainly driven by a reduction in investments in joint ventures[13] Consolidated Statements of Income This section outlines the company's financial performance over the three and six months ended June 30, 2025, detailing revenues, operating profit, and net income Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $10,850 | $10,477 | $21,156 | $20,610 | | Total Operating Profit | $1,657 | $2,820 | $3,982 | $5,702 | | Net Income | $624 | $2,059 | $2,258 | $3,394 | | Net Income Attributable to Company | $578 | $2,044 | $2,288 | $3,345 | | Diluted EPS | $0.03 | $0.11 | $0.12 | $0.18 | - Net income attributable to the company for Q2 2025 was $578,000, a significant decrease from $2,044,000 in Q2 2024. Similarly, for the six-month period, net income fell to $2,288,000 from $3,345,000 year-over-year[16] Consolidated Statements of Cash Flows This section details the cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $13,172 | $15,082 | | Net cash provided by (used in) investing activities | $1,293 | $(14,219) | | Net cash used in financing activities | $(9,918) | $(1,489) | | Net increase (decrease) in cash | $4,547 | $(626) | - For the first six months of 2025, cash from operations decreased to $13.2 million from $15.1 million in the prior year. Investing activities generated $1.3 million in cash, a significant shift from a $14.2 million use of cash in 2024, primarily due to lower investments in properties and joint ventures and higher return of capital from JVs[21] Condensed Notes to Consolidated Financial Statements This section provides additional details on the company's accounting policies, business segments, debt, and other financial matters, offering context to the financial statements - The company operates in four reportable segments: Industrial and Commercial, Mining Royalty Lands, Development, and Multifamily[24][31] - On April 12, 2024, the company effected a 2-for-1 forward stock split, with all share and per-share information retroactively adjusted[27] - As of June 30, 2025, the company had no debt outstanding on its $35 million revolving credit facility with Wells Fargo, with $34.55 million available for borrowing[40] - One lessee in the mining royalty segment accounted for 25.1% of the company's consolidated revenues for the six months ended June 30, 2025[60] - Subsequent to the quarter end, on July 21, 2025, the company amended its credit agreement with Wells Fargo, establishing a five-year, $50 million revolving credit facility[72] - On July 23, 2025, the company entered into a new joint venture to develop two industrial warehouses totaling 377,892 square feet in Lake County, Florida[73] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial performance, noting a 72% Q2 net income decrease despite 5% pro rata NOI growth, driven by segment performance, liquidity, and strategic industrial expansion Executive Overview and Reportable Segments This section outlines the company's four reportable business segments: Multifamily, Industrial and Commercial, Mining Royalty Lands, and Development, detailing their operations and strategic focus - The company's business is organized into four reportable segments: Multifamily, Industrial and Commercial, Mining Royalty Lands, and Development[79] - The Multifamily segment includes six stabilized joint ventures managing apartment buildings and associated retail in Washington, D.C. and Greenville, SC[80][81] - The Industrial and Commercial segment owns and manages nine warehouses, an office building, and two ground leases, with a new 258,279 sq. ft. speculative building added on April 1, 2025[32][90] - The Mining Royalty Lands segment owns approximately 16,648 acres leased for mining royalties, focusing on creating valuable "second lives" for these assets post-mining[85][87] - The Development segment converts non-income producing lands into income-producing properties through construction, sale, or joint ventures, including industrial projects and significant land holdings[92][94][95] Second Quarter Highlights and Recent Developments This section summarizes key financial results for Q2 2025, including net income and pro rata NOI, and highlights recent strategic initiatives and credit facility amendments Q2 2025 vs Q2 2024 Key Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $0.6M | $2.0M | -72% | | Pro Rata NOI | $9.7M | $9.2M | +5% | - The primary goal for 2025 is to set the stage for future growth by leasing vacancies and investing in new projects, particularly in the industrial sector[101] - A new joint venture was formed with SREP to develop 377,892 sq. ft. of warehouse space in Lake County, FL, supporting the goal to double the industrial segment by 2030[102][103] - The company's credit facility with Wells Fargo was amended and restated, increasing the revolving credit facility to $50 million for a five-year term[102][72] Comparative Results of Operations This section provides a detailed comparison of the company's financial performance for the three and six months ended June 30, 2025 and 2024, across key metrics and segments Three Months Ended June 30, 2025 vs 2024 (in thousands) | Metric | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $10,850 | $10,477 | $373 | 3.6% | | Total Operating Profit | $1,657 | $2,820 | $(1,163) | -41.2% | | Net Income Attributable to Company | $578 | $2,044 | $(1,466) | -71.7% | Six Months Ended June 30, 2025 vs 2024 (in thousands) | Metric | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $21,156 | $20,610 | $546 | 2.6% | | Total Operating Profit | $3,982 | $5,702 | $(1,720) | -30.2% | | Net Income Attributable to Company | $2,288 | $3,345 | $(1,057) | -31.6% | - For Q2 2025, Mining Royalty Lands NOI increased 21% YoY, while Industrial and Commercial NOI decreased 15% due to an eviction and lease expirations[102] - For the six months ended June 30, 2025, Mining Royalty Lands NOI increased 20.1% YoY, Industrial and Commercial NOI decreased 8.4%, and Multifamily pro rata NOI grew 2.2%[122][125][132][134] Liquidity and Capital Resources This section details the company's cash position, available credit facilities, and future investment commitments, outlining its financial flexibility and capital deployment plans - As of June 30, 2025, the company had $153.2 million in cash and cash equivalents[136] - The company had $34.55 million available to borrow under its $35 million Wells Fargo revolver as of June 30, 2025, which was subsequently increased to $50 million in July 2025[136][72] - The company expects to invest $73 million into existing real estate holdings and joint ventures during the remainder of 2025 and $153 million beyond 2025 for projects in the pipeline[151] Item 3. Quantitative and Qualitative Disclosures about Market Risks The company is exposed to interest rate risk through its variable-rate borrowings, but the amount of variable rate debt was not material enough to warrant a sensitivity analysis - The company's primary market risk is exposure to interest rate changes from its variable-rate borrowings[155] - As of June 30, 2025, the amount of variable rate debt was not considered material, so a sensitivity analysis was not performed[156] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[159] - There were no changes in internal controls over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[160] Part II. Other Information This section covers additional information including risk factors, equity security purchases, and a list of exhibits filed with the report Item 1A. Risk Factors This section refers readers to the detailed risk factors outlined in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - The company refers to its Annual Report on Form 10-K for the year ended December 31, 2024, for a detailed discussion of risk factors[161] Item 2. Purchase of Equity Securities by the Issuer The company reports no share repurchases during Q3 2025, with approximately $7.36 million remaining available under its stock repurchase program - No shares were repurchased by the company from July 1 through September 30[163] - Approximately $7,363,000 remains available for share repurchases under the company's publicly announced plans[163] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by key officers and XBRL data files - The report includes certifications from the CEO, CFO, and Controller/CAO as required by the Sarbanes-Oxley Act of 2002[168][170]