FRP Holdings, Inc. (NASDAQ:FRPH) Q1 2024 Earnings Call Transcript

FRP Holdings, Inc. (NASDAQ:FRPH) Q1 2024 Earnings Call Transcript May 11, 2024

FRP Holdings, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, everyone. Welcome to today’s FRP Holdings First Quarter 2024 Earnings Conference Call. [Operator Instructions] And now at this time, I’ll turn things over to our host, Mr. John Baker III, Chief Executive Officer. Mr. Baker, please go ahead.

John Baker: Good morning. I am John Baker III, Chief Executive Officer of FRP Holdings, Inc. And with me today are David deVilliers, Jr., our President; John Baker II, our Chairman; David deVilliers III, our Chief Operating Officer; John Milton, our Executive Vice President and General Counsel; and John Koppenstein, our Chief Accounting Officer. As a reminder, any statements on this call, which relate to the future are, by their nature, subject to risks and uncertainties that could cause actual results and events to differ materially as indicated in such forward-looking statements. These risks and uncertainties are listed in our SEC filings. We have no obligation to revise or update any forward-looking statements, except as imposed by law as a result of future events or new information.

To supplement the financial results presented in accordance with generally accepted accounting principles, 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 referenced in this call is net operating income or 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. To reconcile net operating income to GAAP net income, please refer to the segment titled non-GAAP Financial Measures on Pages 9 and 10 of our most recent earnings release.

Any reference to cap rates, asset values, per share values or the analysis of the estimated value of our assets net of debt and liabilities are for illustrative purposes only as a reflection of how management views its various assets for purposes of informing management decisions and do not necessarily reflect the price that would be obtained upon the sale of the asset or the associated costs or tax liability. Now for our financial highlights on the first quarter. Net income for the first quarter was $1.3 million or $0.07 per share versus $565,000 or $0.03 per share in the same period last year. This 130% increase in net income over the same period last year was driven by a $95,000 decrease in interest expense and a $400,000 increase in interest income, a $600,000 decrease in equity and loss of joint ventures due to the lease-up of the verge as well as a slight increase in revenue and operating profit from better Multifamily and Industrial and Commercial segment results, offset by decreased royalties from the Mining Royalty segment and increased losses in the Development segment.

Pro rata net operating income for the first quarter was increased 22% from $6.99 million last year to $8.53 million in the first quarter of 2024. This increase in NOI was primarily due to a 92% increase in Multifamily NOI as well as a 36% increase in Industrial and Commercial NOI compared to the first quarter last year. This increase in Multifamily NOI was driven partly by improved results at Dock 79 and the Merin compared to last year, but mostly by the addition of two assets to this segment due to 408 Jackson and Greenville and Bryant Street in Washington, D.C., achieving stabilization. Yesterday, we posted to our website REIT slide show financial highlights for the first quarter. For those who have not yet seen it, we are now publishing an estimated value of our assets net of debt and liabilities.

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