-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ADgubYNWG3JqYbJw/yehWk8DG56J7+0y9haArCRexMZ0ssHObSw04Tt3vg2IAV8C HIbkCTs8vAPdat5X2T26+Q== 0000844059-03-000008.txt : 20030807 0000844059-03-000008.hdr.sgml : 20030807 20030807134145 ACCESSION NUMBER: 0000844059-03-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PATRIOT TRANSPORTATION HOLDING INC CENTRAL INDEX KEY: 0000844059 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING & COURIER SERVICES (NO AIR) [4210] IRS NUMBER: 592924957 STATE OF INCORPORATION: FL FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17554 FILM NUMBER: 03828335 BUSINESS ADDRESS: STREET 1: 801 ART MUSEUM DRIVE CITY: JACKSONVILLE STATE: FL ZIP: 32207 BUSINESS PHONE: 9043965733 MAIL ADDRESS: STREET 1: 155 E 21ST ST CITY: JACKSONVILLE STATE: FL ZIP: 32206 FORMER COMPANY: FORMER CONFORMED NAME: FRP PROPERTIES INC DATE OF NAME CHANGE: 19920703 10-Q 1 junetext.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark one) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended June 30, 2003 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-17554 PATRIOT TRANSPORTATION HOLDING, INC. (Exact name of registrant as specified in its charter) Florida 59-2924957 (State or other jurisdiction of (I.R.S. Employer) incorporation or organization) Identification No.) 1801 Art Museum Drive, Jacksonville, Florida 32207 (Address of principal executive offices) (Zip Code) 904/396-5733 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YES___ NO X Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of August 4, 2003: 2,932,708 shares of $.10 par value common stock. PATRIOT TRANSPORTATION HOLDING, INC. FORM 10-Q QUARTER ENDED JUNE 30, 2003 CONTENTS Page No. Part I. Financial Information Item 1. Financial Statements Condensed Consolidated Balance Sheets 1 Condensed Consolidated Statements of Income 2 Condensed Consolidated Statements of Cash Flows 3 Notes to Condensed Consolidated Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Item 3. Quantitative and Qualitative Disclosures about Market Risks 14 Item 4. Controls and Procedures 14 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 15 Signatures 16 Exhibit 11 Computation of Earnings Per Share 21 Exhibit 31 Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 22 Exhibit 32 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 25 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) June 30, September 30, 2003 2002 ASSETS Current assets: Cash and cash equivalents $ 1,572 529 Accounts receivable (including related party of $459 and $107) 7,881 7,817 Less allowance for doubtful accounts (552) (474) Prepaid expenses 2,501 2,977 Other current assets 912 641 Total current assets 12,314 11,490 Property, plant and equipment, at cost 221,082 209,275 Less accumulated depreciation and depletion (74,809) (70,908) Net property, plant and equipment 146,273 138,367 Other assets 5,832 5,606 Total assets $164,419 155,463 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable (including related party of $0 and $39) $ 2,577 5,771 Accrued liabilities 6,150 4,890 Long-term debt due within one year 1,518 1,311 Total current liabilities 10,245 11,972 Long-term debt 60,692 47,290 Deferred income taxes 10,069 10,062 Accrued insurance reserves 5,331 5,331 Other liabilities 1,722 1,648 Shareholders' equity: Preferred stock, no par value; 5,000,000 shares authorized - - Common stock, $.10 par value; 25,000,000 shares authorized, 2,932,708 and 3,159,008 shares issued and outstanding, respectively 293 316 Capital in excess of par value 6,064 11,748 Retained earnings 70,003 67,096 Total shareholders' equity 76,360 79,160 Total liabilities and shareholders' equity $164,419 155,463 See accompanying notes. PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands except per share amounts) (Unaudited) THREE MONTHS NINE MONTHS ENDED JUNE 30, ENDED JUNE 30, 2003 2002 2003 2002 Revenues: Related parties $ 2,034 1,335 5,309 5,349 Non-related parties 24,997 23,541 70,837 66,026 27,031 24,876 76,146 71,375 Cost of operations 21,913 19,418 62,783 55,884 Gross profit 5,118 5,458 13,363 15,491 Selling, general and administrative expenses: Related parties 110 116 330 232 Non-related parties 1,908 2,010 5,676 5,732 2,018 2,126 6,006 5,964 Recovery of non-recurring charges related to closed subsidiary (5) (100) (29) (100) Operating profit 3,105 3,432 7,386 9,627 Interest expense, net (899) (803) (2,623) (2,382) Income before income taxes 2,206 2,629 4,763 7,245 Provision for income taxes 860 1,052 1,857 2,898 Net income $ 1,346 1,577 2,906 4,347 Basic earnings per common share $ .45 .50 .95 1.38 Diluted earnings per common share $ .44 .50 .94 1.37 Number of shares used in computing: Basic earnings per share 3,015 3,145 3,067 3,141 Diluted earnings per share 3,054 3,178 3,098 3,166 See accompanying notes. PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED JUNE 30, 2003 AND 2002 (In thousands) (Unaudited) 2003 2002 Cash flows from operating activities: Net income $2,906 4,347 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation, depletion and amortization 8,963 8,182 Deferred income taxes (289) (273) Gain on disposition of real estate, property, plant and equipment (100) (251) Net changes in operating assets and liabilities: Accounts receivable 23 2,465 Prepaid expenses and other current assets 468 1,716 Assets held for sale - 1,191 Accounts payable and accrued liabilities (1,910) 2,266 Net change in insurance reserve and other liabilities 74 123 Other assets, net 47 31 Net cash provided by operating activities 10,182 19,797 Cash flows from investing activities: Purchase of property, plant and equipment (17,657) (10,678) Additions to other assets (502) (726) Proceeds from sale of property, plant and Equipment, and other assets 1,117 562 Net cash used in investing activities (17,042) (10,842) Cash flows from financing activities: Proceeds from long-term debt 50,400 10,200 Net decrease increase in short-term debt - (7,800) Repayment of long-term debt (36,791) (11,779) Repurchase of Company stock (6,118) (31) Exercise of employee stock options 412 123 Net cash provided by (used in) financing activities 7,903 (9,287) Net increase (decrease) in cash and cash equivalents 1,043 (332) Cash and cash equivalents at beginning of year 529 440 Cash and cash equivalents at end of the period $1,572 108 See accompanying notes. PATRIOT TRANSPORTATION HOLDING, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2003 (Unaudited) (1) Basis of Presentation. The accompanying condensed consolidated financial statements include the accounts of Patriot Transportation Holding, Inc. and its subsidiaries (the "Company"). These statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for the interim periods have been included. Operating results for the three months and nine months ended June 30, 2003 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2003. The accompanying condensed consolidated financial statements and the information included under the heading "Management's Discussion and Analysis" should be read in conjunction with the Company's consolidated financial statements and related notes included in the Company's Form 10-K for the year ended September 30, 2002. (2) Recent Accounting Pronouncements. In June 2001, the FASB issued Statement No. 142, "Goodwill and Other Intangible Assets" (SFAS 142). This statement addresses the accounting for intangible assets. The Company adopted SFAS No. 142 on October 1, 2002 and has determined no impairment of goodwill exists and has ceased amortization. Goodwill amortization in the third quarter and first nine months of 2002 was $10,000 and $30,000, respectively. Included in other assets on the Condensed Consolidated Balance Sheet is goodwill of $1,087,000 in both periods. In June 2001, the FASB issued Statement No. 143, "Accounting for Asset Retirement Obligations" (SFAS 143), which addresses financial accounting and reporting for obligations regarding the retirement of tangible long-lived assets and the associated asset retirement costs. The standard applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal use of the asset. The Company adopted the provisions of SFAS 143 in the quarter ended December 31, 2002. Although the Company has significant mining assets, all properties are mined by third parties who are contractually responsible for the legal obligations associated with the retirement of the mining properties. As property owner, the Company is ultimately responsible for any obligations arising from the retirement of the mining properties. However, management has concluded that it is not probable that the Company will incur liabilities associated with retirement of the mines. In December 2002, the FASB issued Statement No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure - an amendment of FASB Statement 123" (SFAS 148). The Company has adopted the provisions of SFAS 148 in the second quarter of 2003 and the required disclosures are contained in Footnote 7. In May 2003, the Financial Accounting Standards Board issued FASB Statement No. 150 (SFAS 150), "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity." SFAS 150 specifies that instruments within its scope embody obligations of the issuer and that, therefore, the issuer must classify them as liabilities. The Company does not expect SFAS 150 to have any impact on its financial Statements. (3) Business Segments. The Company has identified two business segments each of which is managed separately along product lines. All the Company's operations are in the United States. The transportation segment hauls liquid and dry commodities by motor carrier. The real estate segment owns real estate of which a substantial portion is under mining royalty agreements or leased. The real estate segment also holds certain other real estate for investment and is developing commercial and industrial properties. Operating results and certain other financial data for the Company's business segments are as follows (in thousands): Three Months ended Nine Months ended June 30, June 30, 2003 2002 2003 2002 Revenues: Transportation 23,079 21,280 65,057 60,239 Real estate (a) 3,952 3,596 11,089 11,136 27,031 24,876 76,146 71,375 Operating profit Transportation 967 1,748 2,035 4,293 Real estate (b) 2,486 2,036 6,462 6,392 Corporate expenses (348) (352) (1,111) (1,058) Operating profit 3,105 3,432 7,386 9,627 Identifiable assets June 30, Sept 30, 2003 2002 Transportation $ 45,540 47,519 Real estate 115,658 105,850 Cash items 1,572 529 Unallocated corporate assets 1,649 1,565 $164,419 155,463 (a) The three months ended June 30, 2003 and 2002 and the nine months ended June 30, 2003 and 2002 include revenues of $3,000, $199,000, $68,000 and $219,000, respectively, from the sale of real estate. (b) Operating profit from the sale or disposal of real estate was ($18,000), $153,000, $47,000 and $110,000 for the three months and the nine months ended June 30, 2003 and 2002, respectively. (4) Long-Term debt. Long-term debt is summarized as follows (in thousands): June 30, September 30, 2003 2002 Revolving Credit, Uncollateralized, payable in 2004 $ 22,500 12,500 5.7% to 9.5% mortgage note payable in installments through 2020 39,710 36,101 62,210 48,601 Less portion due in one year 1,518 1,311 $60,692 47,290 (5) Agreements to Sell Real Estate. In February 2002, a subsidiary of the Company signed an Agreement to sell 108 acres of land located in the northwest quadrant of I-395 and I-495 at Edsall Road in Springfield, Virginia to Florida Rock Industries, Inc. (FRI), a related party, for $15,000,000. Closing is subject to a title search and surveys and may occur within 45 days of the Company giving notice to FRI to close or, subsequent to June 30, 2003 within 45 days of either party giving notice to close. If FRI fails to close by December 31, 2003, at no fault of the Company, the Company may retain the $100,000 binder deposit and be under no further obligation to close. FRI has the right to terminate this Agreement prior to receiving the Company's notice to close if there shall exist or the consummation of the sale would cause a default in the Credit Agreement among FRI and Wachovia Bank, et. al. The Agreement was approved by a committee of independent directors of the Company after review of a development feasibility study and other materials, consultation with management and advice of independent counsel. The Company intends to structure this transaction as a tax deferred exchange under Section 1031 of the United States Internal Revenue Code and the Treasury Regulations promulgated thereunder. If the transaction closes, the Company will recognize a gain on the sale of approximately $7,772,000 net of income taxes, or $2.52 per diluted share. The tract is being rented to a subsidiary of FRI and the Company has received rental income of approximately $488,000 for the nine months ended June 30, 2003. In April, 2003, the Company announced that a subsidiary has agreed to sell 796 acres of land located in St. Mary's County, Maryland to FRI for $1,836,000. FRI has 120 days to inspect and investigate the property and may, in its sole discretion, terminate the Agreement during the inspection period without penalty. If the Agreement is not terminated during the inspection period or valid extensions thereof, closing is to occur no later than December 15, 2003. The Agreement was approved by a committee of independent directors of the Company after receipt of an appraisal and consultation with management. If this transaction closes, the Company will recognize a gain on the sale of approximately $647,000 net of income taxes, or $.21 per diluted common share. On May 7, 2003, the Company announced that a subsidiary has agreed to sell a 935 acre parcel of property in Miami, Florida to FRI for $1,638,000. The property is principally composed of mined-out lakes, mitigation areas, 145 acres of mineable land and 32 acres of roads and railroad track right-of-ways. The closing of the sale is subject to a definitive agreement with closing to occur no later than December 15, 2003. The terms of the agreement were approved by the Company's Audit Committee which, is comprised of independent directors, after considering, among other factors, the terms of the existing lease agreement and consultation with management. If this transaction closes, the Company will recognize a gain of approximately $999,000, net of income taxes, or $.32 per diluted common share. (6) Repurchase of Company Stock. During the first quarter of Fiscal 2003, the Company repurchased and retired 111,300 shares of its common stock for $2,485,000. In the third quarter, the Company repurchased and retired 135,000 shares of its common stock for $3,633,000. As of August 6, 2003, the Board of Directors has authorized Management to repurchase $3,000,000 of the Company's common stock. (7) Stock-Based Compensation Plan. The Company accounts for its stock-based employee compensation plans under the recognition and measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to Employees", and related interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the company had applied the fair value recognition provisions of FASB Statement No. 123, "Accounting for Stock-Based Compensation", to stock-based employee compensation. Three Months ended Nine Months ended June 30, June 30, 2003 2002 2003 2002 Net income, as reported $ 1,346 1,577 2,906 4,347 Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects 129 87 423 269 Pro forma net income $ 1,217 1,490 2,483 4,078 Earnings per share: Basic-as reported $ .45 .50 .95 1.38 Basic-pro forma $ .41 .47 .81 1.30 (8) Contingent Liabilities. Certain of the Company's subsidiaries are involved in litigation on a number of matters and are subject to certain claims that arise in the normal course of business. The Company has retained certain self-insurance risks with respect to losses for third party liability and property damage. In the opinion of management, based upon the advice of outside legal counsel, none of these matters are expected to have a materially adverse effect on the Company's consolidated financial statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Three Months Operating Results For the third quarter of Fiscal 2003, consolidated revenues were $27,031,000, an increase of $2,155,000 or 8.7% over the same quarter last year. The transportation segment's revenues for the third quarter of Fiscal 2003 were $23,079,000, an increase of $1,799,000 or 8.5% over the same quarter last year. Approximately $1,375,000 of this increase was a result of a 6.7% increase in miles hauled in the third quarter of 2003 over the same quarter last year. The balance of the increase was primarily due to higher fuel surcharges billed to mitigate rising fuel costs. The increase in miles hauled resulted primarily from new business generated from the May 30, 2002 acquisition of the operating assets of Infinger Transportation, Inc. (Infinger) and a 9.8% increase in miles in the flatbed operations, from the same quarter last year. Real estate revenues were $3,952,000 for the third quarter of Fiscal 2003, an increase of $356,000 or 9.9% from the third quarter of Fiscal 2002. Royalties from mining contracts increased $483,000 or 56.0% primarily resulting from a 31.3% increase in tons mined and an increase in average royalty per ton mined as compared to the same quarter last year. Revenues from flex office-warehouse properties increased $56,000 or 2.7%, primarily due to an 8.2% increase in average leased square feet and minimal price increases. The real estate group had property sales of $3,000 in the third quarter of 2003 compared to property sales of $199,000 in the third quarter of 2002. Consolidated gross profit for the third quarter of 2003 was $5,118,000, a decrease of $340,000 or 6.2% from the third quarter of last year. Gross profit in the transportation segment decreased $790,000 or 23.1% primarily due to higher risk insurance premiums and claims expense related to prior years' workers compensation occurrences. Additionally, depreciation expense is higher as a result of the Infinger asset additions and a newer trucking fleet. Gross profit in the real estate segment increased $450,000 or 22.1% from the third quarter of 2002 due to increased royalties from mining operations and improved gross profit from developed properties, partially offset by reduced profit from property sales. Selling, general and administrative expense decreased $108,000 or 5.1% for the third quarter of 2003 compared to the same period last year. Selling, general and administrative expenses, as a percent of consolidated revenues excluding property sales, was 7.5% as compared to 8.6% last year. Interest expense, net of capitalized interest, increased $96,000 for the third quarter due primarily to an increase in the average debt outstanding. The provision for income taxes was 39% of income before taxes in the third quarter of 2003 and 40% in the third quarter of 2002. Net income was $1,346,000 or $.44 per diluted share for the third quarter of Fiscal 2003 compared to $1,577,000 or $.50 per diluted share for the same quarter last year. Nine Months Operating Results. For the nine months of Fiscal 2003, consolidated revenues were $76,146,000, an increase of $4,771,000 or 6.7% over the same period last year. The transportation segment's revenues for the nine months of Fiscal 2003 were $65,057,000, an increase of $4,818,000 or 8.0% over the same period last year. Approximately $2,771,000 of this increase resulted from a 4.5% increase in miles hauled primarily due to the Infinger acquisition on May 30, 2002, partially offset by the loss of a major customer. The balance of the increase was primarily due to higher fuel surcharges as a result of rising fuel costs. Real estate revenues were $11,089,000 for the first nine months of 2003, a decrease of $47,000 or 0.4% from the first nine months of 2002. Royalties from mining contracts decreased $365,000 or 7.3% primarily resulting from completion of mining at two locations during the third quarter of 2002. Revenues from flex office- warehouse properties increased $468,000 or 7.9%, primarily due to a 7.9% increase in leased square feet and modest price increases. Property sales were $68,000 in the nine months of 2003 as compared to property sales of $219,000 during the nine months of 2002. Consolidated gross profit decreased $2,128,000 or 13.7% for the nine months as compared to the same period last year. Gross profit in the transportation segment decreased $2,198,000 or 24.2% as a result of higher fuel costs per mile and higher risk insurance premiums and claims expense related to prior years' workers compensation occurrences. Additionally, depreciation expense was higher as a result of the Infinger asset additions and a newer trucking fleet. Gross profit in the real estate segment increased $70,000 or 1.1% from the nine months of 2002 due to a $458,000 increase in gross profit from newly developed properties, which was mostly offset by decreased royalties from mining operations. Selling, general and administrative expense increased $42,000 or 0.7% for the nine months of 2003 compared to the same period last year. The increase is primarily attributed to a benefit in the first nine months of last year of $177,000 related to the recovery of a closed subsidiary's accounts receivable in excess of amounts anticipated. A similar benefit of $49,000 was recorded in the first nine months of 2003. On a comparative basis, selling, general and administrative expenses, exclusive of these benefits, as a percent of consolidated revenues excluding property sales was 8.0% compared to 8.6% last year. Interest expense, net of capitalized interest, increased $241,000 for the nine months due to an increase in the average debt outstanding. The provision for income taxes was 39% of income before taxes in the first nine months of 2003 and 39% in the first nine months of 2002. Net income was $2,906,000 or $.94 per diluted share for the first nine months of 2003 compared to $4,347,000 or $1.37 per diluted share for the same period last year. Summary and Outlook The Company's real estate development operations have continued to benefit from a favorable national interest rate environment and encouraging tenant occupancy. Positive market acceptance continues for the Company's flexible office-warehouse product, implying further development expansion. Overall freight demand for the Company's transportation group has gradually strengthened, though still somewhat muted in markets served by the tank truck operations as an uncertain national economy has dampened travel and resulting fuel consumption. Freight rate increases and improved efficiencies from equipment utilization will both be pursued to offset chronic increases in risk and health insurance expenses. Liquidity and Capital Resources For the first nine months of Fiscal 2003, a combination of operating cash flow, additional long term debt, and borrowings under the $37,000,000 revolving credit agreement (Revolver) funded the Company's purchase of additional property, plant and equipment of $17,657,000 and the repurchase of Company stock for $6,118,000. At June 30, 2003, $14,500,000 was available under the Revolver. As of June 30, 2003, the Company is committed to spend an additional $2,731,000 to complete construction of a bulk warehouse which is preleased to a tenant for 15 years. Construction is expected to be completed by October 2003. These expenditures will be financed in the interim from cash flow from operating activities and funds available under the Revolver. The Company has obtained a commitment for a first mortgage loan of $8,500,000 to be collateralized by this building. The loan which is subject to building completion and other normal conditions is for a period of 15 years with level monthly payments of principal and interest at 5.69%. The proceeds will be used to reduce amounts owed on the Revolver. During the third quarter of 2003, a subsidiary of the Company obtained a first mortgage loan in the amount of $4,600,000 collateralized by a building. The loan is for a period of 20 years with level monthly payments of principal and interest at 5.68%. The proceeds were used to reduce amounts owed on the Revolver. In January 2003, the Company obtained a $2,280,000 one-year irrevocable Letter of Credit which will be automatically extended for additional one-year periods unless notified not less than thirty days before the expiration date. The Letter of Credit replaced cash collateral with an insurance company in a like amount which was used to reduce the outstanding balance under the Revolver. The Board of Directors has authorized Management to repurchase shares of the Company's common stock from time to time as opportunities arise. During Fiscal 2003, the Company repurchased 246,300 shares of its common stock for $6,118,000. On August 6, 2003 the Board of Directors increased the current authorization to repurchase the Company's common stock up to $3,000,000. While the Company is affected by environmental regulations, such regulations are not expected to have a major effect on the Company's capital expenditures or operating results. Based on current expectations, management believes that its internally generated cash flow and access to existing credit facilities are sufficient to meet the liquidity requirements necessary to fund operations, capital requirements and debt service. Related Party Transactions Five of the Company's directors are also directors of Florida Rock Industries, Inc. ("FRI"). Such directors own approximately 27.6% of the stock of FRI and 46.6% of the stock of the Company. Accordingly, FRI and the Company are considered related parties. The Company, through its transportation subsidiaries, hauls commodities in tank trucks for FRI and customers of FRI. It also hauls diesel fuel and other supplies for FRI. Charges for these services are based on prevailing market prices. Other wholly owned subsidiaries lease certain construction aggregates mining and other properties and provides construction management services to FRI. In addition, the Company outsources certain functions to FRI, including some administrative, human resources, legal and risk management services. A subsidiary of the Company signed an agreement to sell land to FRI for $15,000,000. If the sale occurs, the Company will recognize a gain on the sale of approximately $7,722,000 net of income taxes or $2.52 per diluted share. A subsidiary of the Company has also agreed to sell two other parcels of land to FRI for $1,836,000 and $1,638,000, respectively. Reinvestment of the proceeds from these transactions is expected to facilitate the Company's long-term plan to build and own a portfolio of successful rental properties. If these sales occur, the Company will recognize a gain, net of income taxes, of $647,000 or $.21 per share and $999,000 or $.32 per share, respectively. For additional information see Note 5 of Notes to Condensed Consolidated Financial Statements. Other During Fiscal 2002, the transportation segment's ten largest customers accounted for approximately 45.5% of the transportation segment's revenue. The loss of one or more of any one of these customers could have an adverse effect on the Company's revenue and income. During the fourth quarter of Fiscal 2002, the Company reported that one of its ten largest customers indicated it was moving a majority of the business it was doing with the Company to other carriers. The Company estimates lost revenues from this customer to be approximately 6% of the transportation segment's revenues for Fiscal 2002. The loss of this revenue has had an adverse effect on the Company's operating income in 2003, but has been mostly offset by additional revenues from existing and new customers as well as revenue generated from the acquisition of the operating assets of Infinger on May 30, 2002. The Company owns two parcels of undeveloped real estate in the southeast quadrant of Washington D.C. on the banks of the Anacostia River and has been working with the District of Columbia Zoning Commission to obtain appropriate zoning for development. In 2003, the Zoning Commission granted preliminary approval of the size and scope of a proposed Planned Unit Development (PUD) and gave the Company until May of 2004 to submit modified drawings that would conform to the approved design guidelines. The design guidelines provide for a maximum allowable commercial development of 625,000 square feet and a minimum residential development of 440,000 square feet. If approval of the redesign is obtained, the Company will have an additional two years to begin development of the site in accordance with the approved PUD. For more information on this property see Item 2 of the Company's Annual Report on Form 10-K. Forward-Looking Statements. Certain matters discussed in this report contain forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from these indicated by such forward-looking statements. These forward-looking statements relate to, among other things, capital expenditures, liquidity, capital resources and competition and may be indicated by words or phrases such as "anticipate", "estimate", "plans", "projects", "continuing", "ongoing", "expects", "management believes", "the Company believes", "the Company intends" and similar words or phrases. The following factors and others discussed in the Company's periodic reports and filings with the Securities and Exchange Commission are among the principal factors that could cause actual results to differ materially from the forward-looking statements: driver availability and cost; availability and terms of financing; freight demand for petroleum products including recessionary and terrorist impacts on travel in the Company's markets; freight demand for building and construction materials in the Company's markets; risk insurance markets; competition; general economic conditions; demand for flexible warehouse/office facilities; restructuring charges; interest rates; levels of construction activity in FRI's markets; fuel costs; and inflation. However, this list is not a complete statement of all potential risks or uncertainties. These forward-looking statements are made as of the date hereof based on management's current expectations, and the Company does not undertake an obligation to update such statements, whether as a result of new information, future events or otherwise. Additional information regarding these and other risk factors may be found in the Company's other filings made from time to time with the Securities and Exchange Commission. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS There are no material changes to the disclosures made in Form 10-K for the fiscal year ended September 30, 2002 with respect to this item. ITEM 4. CONTROLS AND PROCEDURES Evaluation of disclosure controls and procedures. As required by Rule 13A-15 under the Exchange Act, within the 90 days prior to the filing date of this report, the Company carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of the Company's management, including the Company's President and Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. The evaluation conducted by the Company's President and Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer has provided them with reasonable assurance that the Company's disclosure controls and procedures are effective in timely alerting them to material information relating to the Company required to be included in the Company's periodic SEC filings. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rule and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company's Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer as appropriate, to allow timely decisions regarding required disclosures. Changes in internal controls. There have been no changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits. The response to this item is submitted as a separate Section entitled "Exhibit Index", starting on page 11. (b) Reports on Form 8-K. On April 29, 2003, the Company filed a Form 8-K reporting under Item 7, a press release announcing its earnings for the second quarter of 2003. 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 thereunto duly authorized. August 7, 2003 PATRIOT TRANSPORTATION HOLDING, INC. John E. Anderson John E. Anderson President and Chief Executive Officer Ray M. Van Landingham Ray M. Van Landingham Vice President Finance & Administration and Chief Financial Officer Gregory B. Lechwar Gregory B. Lechwar Controller and Chief Accounting Officer PATRIOT TRANSPORTATION HOLDING, INC. FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2003 EXHIBIT INDEX (3)(a)(1) Articles of Incorporation of Patriot Transportation Holding Inc., incorporated by reference to the corresponding exhibit filed with Form S-4 dated December 13,1988. File No. 33-26115. (3)(a)(2) Amendment to the Articles of Incorporation of Patriot Transportation Holding, Inc. filed with the Secretary of State of Florida on February 19, 1991 incorporated by reference to the corresponding exhibit filed with Form 10-K for the fiscal year ended September 30, 1993. File No. 33-26115. (3)(a)(3) Amendments to the Articles of Incorporation of Patriot Transportation Holding, Inc. filed with the Secretary of State of Florida on February 7,1995, incorporated by reference to an appendix to the Company's Proxy Statement dated December 15, 1994. File No. 33-26115. (3)(a)(4) Amendment to the Articles of Incorporation of Patriot Transportation Holding, Inc., filed with the Florida Secretary of State on May 6, 1999 incorporated by reference to a form of such amendment filed as Exhibit 4 to the Company's Form 8-K dated May 5, 1999. File No. 33-26115. (3)(a)(5) Amendment to the Articles of Incorporation of Patriot Transportation Holding, Inc. filed with the Secretary of State of Florida on February 21, 2000, incorporated by reference to the corresponding exhibit filed with Form 10-Q for the quarter ended March 31, 2000. File No. 33-26115. (3)(b)(1) Restated Bylaws of Patriot Transportation Holding, Inc. adopted December 1, 1993, incorporated by reference to the corresponding exhibit filed with Form 10-K for the fiscal year ended September 30, 1993. File No. 33-26115. (3)(b)(2) Amendment to the Bylaws of Patriot Transportation Holding, Inc. adopted August 3, 1994, incorporated by reference to the corresponding exhibit filed with Form 10-K for the fiscal year ended September 30, 1994. File No. 33-26115. (3)(b)(3) Amendment to the Bylaws of Patriot Transportation Holding, Inc. adopted December 5, 2001, incorporated by reference to the corresponding exhibit filed with Form 10-Q for the quarter ended December 31, 2001. File No. 33-26115. (4)(a) Articles III, VII and XII of the Articles of Incorporation of Patriot Transportation Holding, Inc., incorporated by reference to an exhibit filed with Form S-4 dated December 13, 1988. And amended Article III, incorporated by reference to an exhibit filed with Form 10-K for the fiscal year ended September 30, 1993. And Articles XIII and XIV, incorporated by reference to an appendix filed with the Company's Proxy Statement dated December 15, 1994. File No. 33-26115. (4)(b) Specimen stock certificate of Patriot Transportation Holding, Inc., incorporated by reference to an exhibit filed with Form S-4 dated December 13, 1988. File No. 33-26115. (4)(c) Revolving Credit Agreement dated as of January 9, 2002 among Patriot Transportation Holding, Inc. as Borrower, the Lenders from time to time party hereto and SunTrust Bank as Administrative Agent, incorporated by reference to an exhibit filed with Form 10-Q for the quarter ended December 31, 2001. File No. 33-26115. (4)(d) The Company and its consolidated subsidiaries have other long-term debt agreements which do not exceed 10% of the total consolidated assets of the Company and its subsidiaries, and the Company agrees to furnish copies of such agreements and constituent documents to the Commission upon request. (4)(e) Rights Agreement, dated as May 5, 1999 between the company and First Union National Bank, incorporated by reference to Exhibit 4 to the Company's Form 8-K dated May 5, 1999. File No. 33-26115. (10)(a) Various lease backs and mining royalty agreements with Florida Rock Industries, Inc., none of which are presently believed to be material individually, except for the Mining Lease Agreement dated September 1, 1986, between Florida Rock Industries Inc. and Florida Rock Properties, Inc., successor by merger to Grandin Land, Inc. (see Exhibit (10)(c)), but all of which may be material in the aggregate, incorporated by reference to an exhibit filed with Form S-4 dated December 13, 1988. File No. 33-26115. (10)(b) License Agreement, dated June 30, 1986, from Florida Rock Industries, Inc. to Florida Rock & Tank Lines, Inc. to use "Florida Rock" in corporate names, incorporated by reference to an exhibit filed with Form S-4 dated December 13, 1988. File No. 33-26115. (10)(c) Mining Lease Agreement, dated September 1, 1986, between Florida Rock Industries, Inc. and Florida Rock Properties, Inc., successor by merger to Grandin Land, Inc., incorporated by reference to an exhibit previously filed with Form S-4 dated December 13, 1988. File No. 33-26115. (10)(d) Summary of Medical Reimbursement Plan of Patriot Transportation Holding, Inc., incorporated by reference to an exhibit filed with Form 10-K for the fiscal year ended September 30, 1993. File No. 33-26115. (10)(e) Summary of Management Incentive Compensation Plans, incorporated by reference to an exhibit filed with Form 10-K for the fiscal year ended September 30, 1994. File No. 33-26115. (10)(f) Management Security Agreements between the Company and certain officers, incorporated by reference to a form of agreement previously filed (as Exhibit (10)(I)) with Form S-4 dated December 13, 1988. File No. 33-26115. (10)(g)(1) Patriot Transportation Holding, Inc. 1989 Employee Stock Option Plan, incorporated by reference to an exhibit filed with Form S-4 dated December 13, 1988. File No. 33-26115. (10)(g)(2) Patriot Transportation Holding, Inc. 1995 Stock Option Plan, incorporated by reference to an appendix to the Company's Proxy Statement dated December 15, 1994. File No. 33-26115. (10)(g)(3) Patriot Transportation Holding, Inc. 2000 Stock Option Plan, incorporated by reference to an appendix to the Company's Proxy Statement dated December 15, 1999. File No. 33-26115. (10)(h) Purchase and Sale Agreement dated February 6, 2002 between Florida Rock Industries, Inc. and Florida Rock Properties, Inc., incorporated by reference to an exhibit filed with Form 10-Q for the quarter ended December 31, 2001. File No. 33-26115. (10)(i) Purchase and Sale Agreement dated May 7, 2003 between Maryland Rock Industries, Inc. and Florida Rock Industries, Inc. and Florida Rock Properties, Inc. (11) Computation of Earnings Per Common Share. (31)(a) Certification of John E. Anderson. (31)(b) Certification of Ray M. Van Landingham. (31)(c) Certification of Gregory B. Lechwar. (32) Certification of Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 20 EX-10 3 maryland.txt Exhibit 10(i) PURCHASE AND SALE AGREEMENT MARYLAND ROCK INDUSTRIES, INC., a Maryland corporation, and FLORIDA ROCK INDUSTRIES, INC., a Florida corporation, and/or its assigns (jointly and severally, "BUYER"), and FLORIDA ROCK PROPERTIES, INC., a Florida corporation ("SELLER"), hereby agree that SELLER will sell and BUYER will buy the following described property, upon the following terms and conditions. The property known as Breton Bay Property, in the Third Election District of St. Mary's County, Maryland, containing 796 acres of land, more or less, and as more particularly described below (the "Property"). SEE EXHIBIT A (which is fully incorporated in this Agreement by this reference) It is understood that the Property will be conveyed by SPECIAL WARRANTY DEED subject to taxes not yet due and payable for the year of the closing and thereafter, existing zoning, covenants, restrictions, easements of record, easements and other matters of record and in fact that would be shown on an accurate as-built survey and the matters set forth on the title insurance commitment delivered under paragraph 6 of this Agreement. All utility and other security deposits shall be and remain the property of SELLER, and as of the date of the closing all utility and other services shall be transferred to the account of BUYER and SELLER shall receive a refund of its security deposits or alternatively be entitled to a credit for any deposits transferred to BUYER'S account by such utility and other services. 1. TOTAL PURCHASE PRICE: The total purchase price to be paid by BUYER is payable as follows: (a) Binder Deposit, as stated below, and Additional Deposits as hereinafter defined, as applicable, which will be deposited in accordance with paragraph 8(b) of this Agreement and will be distributed according to the provisions (b) Balance due at closing (not including BUYER'S closing costs, prepaid items or prorations) in U.S. TOTAL PURCHASE PRICE $1,836,000.00 BUYER will deposit in cash or readily available funds with SELLER as a binder deposit Twenty Thousand Dollars ($20,000 (the "Binder Deposit"). The Binder Deposit and any Additional Deposits (as defined in paragraph 8(b) hereof) will be held by SELLER on the terms set forth in this Agreement for the mutual benefit of the parties to this Agreement. The Binder Deposit and any Additional Deposits may be commingled with other funds of SELLER in SELLER'S sole discretion. BUYER shall not be entitled to interest on the Binder Deposit and any Additional Deposits. SELLER shall deliver the Binder Deposit (but notand any Additional Deposits), (without interest), to the BUYER, upon receipt by SELLER, within the Inspection and Study Period, as that term is defined in paragraph 8(a) of this Agreement, of written notice that BUYER has exercised its option to terminate this Agreement pursuant to paragraph 8(a) of this Agreement. Except as otherwise provided in this Agreement, if SELLER does not receive notice from BUYER during the Inspection and Study Period that it has terminated this Agreement, the SELLER will apply the Binder Deposit and any Additional Deposits (without interest) to the Total Purchase Price at the closing of the purchase of the Property, or will retain the Binder Deposit and any Additional Deposits if the closing does not occur due to the default by BUYER under this Agreement. 2. SPECIAL PROVISIONS: (a) THIS Agreement has been approved by the Board of Directors of the BUYER. (b) BUYER has paid and will continue to pay all real property taxes imposed on the Property as they become due. SELLER shall keep the Property free and clear of liens and encumbrances, except any existing Deed of Trust, which shall be paid as it becomes due by SELLER and paid in full with the proceeds at closing. 3. CLOSING COSTS: BUYER and SELLER equally will pay recording fees and any recordation and transfer taxes due to record the deed. BUYER will pay BUYER'S attorney's fees and costs, owner's title insurance costs and premiums, survey costs, and all other costs not expressly provided herein to be paid by SELLER. SELLER will pay SELLER'S attorney's fees and costs. SELLER will deliver proof satisfactory to BUYER that BUYER will not be obligated to withhold any of the purchase price under the Foreign Investment in Real Property Tax Act or shall provide funds at closing to enable BUYER to meet the tax obligation. 4. PRORATIONS: All real estate taxes, ad valorem taxes, and other public or governmental charges or assessments against the Property payable on an annual basis and not otherwise paid or payable by BUYER, and the cost of service contracts assumed by BUYER (if any), will be pro-rated as of the date of closing, and are to be assumed and thereafter paid by BUYER. Taxes shall be pro-rated based upon the actual amount of taxes, if known, for the fiscal year in which the closing occurs and, if unknown, shall be based upon the prior year taxes. If such proration of taxes is based upon an estimate, BUYER and SELLER agree to re- prorate after closing once the actual amount of taxes due for the year of closing is known. 5. SALES COMMISSION: Each party represents and warrants to the other that it has not consulted a real estate broker or salesman in connection with the transaction contemplated by this Agreement. If any other person or entity shall assert a claim to any real estate commission or other compensation against either SELLER or BUYER on account of alleged employment as a broker, finder, listing agent, co-broker, consultant or otherwise, then the party under this Agreement by, through or under whom such person or entity claims any such employment or compensation shall indemnify, defend and hold harmless the other party against 2 and from any and all such claims and all costs, expenses and liabilities incurred in connection with such claim or any action or proceedings brought thereon. 6. TITLE EVIDENCE: Within thirty (30) days after delivery of a Notice to Close, at BUYER'S sole cost and expense, BUYER will obtain a Title Insurance Commitment for an owner's policy in the amount of the Total Purchase Price from a title insurance company licensed to write title insurance in the State of Maryland. The title commitment shall have attached to it legible copies of all instruments described in the commitment. BUYER will deliver a copy of the title commitment, with applicable copies, to SELLER within five (5) days of receipt by BUYER. The title commitment must disclose the title to be good, marketable and insurable, and subject to no encumbrances or exceptions, other than Permitted Exceptions. "Permitted Exceptions" shall include real estate and ad valorem taxes for the current year and covenants, restrictions and easements and other title exceptions that, in BUYER'S discretion reasonably applied, do not materially impair the use of the property as currently used. If either the Survey described in paragraph 7 or the title evidence described above in this paragraph 6 reveals any encroachments, overlaps, easements, restrictions, covenants, conditions or other defects other than Permitted Exceptions, BUYER, within thirty (30) days after the applicable Notice to Close, may then do one of the following as BUYER'S sole remedy: (a) Accept the uncured title defects and require the SELLER to deliver the title to the Property at the Closing in its existing condition with no reduction in the purchase price; or (b) Require SELLER to return to BUYER the Security Deposits, whereupon this Agreement shall be automatically terminated and all parties released from further obligation under this Agreement. BUYER will pay the cost of title insurance. SELLER further agrees to execute and deliver to the title insurance company at Closing an owner's affidavit of possession and no liens and such documentation, if any, as the title company shall reasonably require to evidence that the execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement have been duly authorized and to delete the "standard" and "gap" exceptions, except Permitted Exceptions and uncured title defects. 7. SURVEY: Within thirty (30) days after delivery of a Notice to Close, at BUYER'S sole cost and expense, BUYER shall obtain an as-built survey for the Property. The survey shall not be dated earlier than ninety (90) days prior to the closing and shall comply with the minimum detail requirements for land title surveys as adopted by the American Land Title Association and American Congress of Surveying and Mapping and otherwise meet the technical standards required of surveys in the State of Maryland. BUYER will deliver a copy of the survey to SELLER within five (5) days of receipt by BUYER. If the survey shows any encroachment on the Property of any structure on the Property or shows any restriction or set back line violation or other matter which renders title unmarketable, such matter shall be considered and treated as a title defect under paragraph 6. 3 8. INSPECTION AND STUDY AND TIME FOR CLOSING : (a) Subject to extension in accordance with subparagraph (b) below, BUYER shall have until the expiration of a period of time commencing upon the execution of this Agreement and ending one hundred and twenty (120) days from the date of execution of the Agreement (the "Inspection and Study Period") to inspect, test, engineer and conduct any and all studies, inspections and investigations of the Property as BUYER may deem advisable. Should BUYER determine in its sole discretion on or before the termination of the Inspection and Study Period that the Property does not meet its requirements for any reason, then BUYER may terminate this Agreement during the Inspection and Study Period by delivering notice of termination to SELLER. Upon the termination of this Agreement by BUYER within the Inspection and Study Period, this Agreement shall become null and void, and both BUYER and SELLER shall have no further obligations under this Agreement. If the Agreement is not terminated by BUYER within the Inspection and Study Period, BUYER shall continue to have the right until the consummation of the transaction contemplated by this Agreement, or earlier termination of this Agreement, to enter the Property, at its sole risk and expense, at reasonable times and survey the Property and conduct inspections and tests of all physical portions of the Property, including without limitation, the soil, the air conditioning and heating systems, electrical systems, plumbing, foundations, structure, sprinkler systems, roofs, sewage distribution systems, and paint and finished work. (b) Prior to the expiration of the Inspection and Study Period described in subparagraph (a) above or of its extension as herein provided, BUYER may extend such Inspection and Study Period for two successive thirty (30) day terms by depositing the sum of Twenty Thousand Dollars ($20,000.00) for each thirty (30) day term prior to the initial expiration date of the Inspection and Study Period or the first thirty (30) day extension thereof . Such sums paid by BUYER to SELLER for such extensions shall be deposited with SELLER to beand held by SELLER as an "Additional Deposit". The Binder and Additional Deposits shall be applied to the total purchase price at closing. However, should BUYER fail to terminate this Agreement during the Inspection and Study Period (as it may be extended) and thereafter fail to close for any reason, such Binder and Additional Deposits shall be paid to SELLER pursuant to Paragraph 14 below. If BUYER terminates this Agreement during the initial 120 day Inspection and Study Period, BUYER shall be entitled only to the refund of the Binder Deposit; and after the initial 120 day Inspection and Study Period, and, notwithstanding any termination of this Agreement by BUYER pursuant to this paragraph 8, the Binder Deposit and all Additional Deposits paid by BUYER to SELLER for any such extensions shall not be refunded to BUYER, but shall be retained by SELLER as its sole property. (c) DELETED. (d) If this Agreement is not terminated as provided in subparagraph (a) or (b) above, Buyer will deposit with SELLER, as an Additional Deposit, additional sums so as to increase the total Binder and Additional Deposits paid to and held by SELLER to One Hundred Twenty Thousand Dollars ($120,000.00) and the transaction will be closed and all closing papers delivered on or before that certain date which is no later than forty-five (45) days after the 4 termination of the Inspection and Study Period or a date mutually agreeable to SELLER and BUYER, but not later than December 15, 2003, at the office of SELLER or legal counsel of SELLER, in Annapolis, Maryland BUYER will have no ownership interest in the Property until closing. (e) BUYER and SELLER shall, at the time of closing, execute all other papers and documents that may become reasonably necessary in order to close this transaction, as may be suggested by the counsel of either BUYER or SELLER and approved by the other party's counsel. (f) SELLER will receive all rents and income from the Property until delivery of the Property a closing. (g) If BUYER enters the Property prior to closing, BUYER shall (a) keep the Property free of any liens or claims resulting therefrom, (b) defend, indemnify and hold harmless SELLER against and from any claim, liability, damages, costs and expenses (including reasonable attorney's fees and other costs of litigation) imposed or sought to be imposed on SELLER as a result of the actions or negligence of BUYER, its employees, agents, and contractors on the Property, (c) restore the Property to its condition prior to any such entry, work, investigations and the like on the Property. BUYER'S obligations under this section shall survive closing or termination of this Agreement. 9. LOSS OR DAMAGE: The risk of loss to the Property will remain with the SELLER until closing, provided, however, BUYER shall be responsible for and shall indemnify SELLER for all damages or loss to the Property caused by BUYER or its agents prior to the closing. If the property is damaged by FORCE MAJEURE, fire or other casualty prior to closing, and SELLER declines to repair or restore, BUYER will have the option in its discretion reasonably applied of either taking the Property as is, together with any insurance proceeds payable by virtue of such loss or damage, or of canceling this Agreement. If BUYER cancels this Agreement under this paragraph 9, SELLER will return the Binder and Additional Deposits within five (5) days and neither party will have any further obligations arising from this Agreement. SELLER will maintain appropriate insurance on the Property until closing. 10. CONDEMNATION: If at any time prior to closing, any proceedings shall be commenced or consummated for the taking of the Property or a material part of the Property for public or quasi-public use pursuant to the power of eminent domain, either BUYER or SELLER, by written notice to the other party within thirty (30) days of notice of such taking, may terminate this Agreement, and thereupon all parties shall be relieved of all further obligations under this Agreement and the Binder and Additional Deposits shall be returned to BUYER. Unless this Agreement is so terminated, this Agreement shall remain in full force and effect, and SELLER shall assign and transfer to BUYER any interest in any awards made with respect to the Property or the total purchase price shall be reduce appropriately. If at any time prior to closing any proceedings shall be commenced or consummated for the taking of any portion of the Property that is immaterial for public or quasi-public use pursuant to the power of eminent domain, this Agreement shall remain in full force and effect and neither party shall have the right 5 to cancel this Agreement. For purposes of this paragraph 10 a material portion of the Property shall be an amount of land area that alters or impairs the use of the Property or effects compliance with applicable zoning code. 11. CONDITION: SELLER agrees to deliver the Property in its PRESENT "AS IS" CONDITION with no representations or warranties on the part of SELLER except as otherwise specifically set forth in this Agreement. BUYER will have the opportunity to inspect the Property and HAS NOT RELIED UPON ANY REPRESENTATIONS MADE BY SELLER in describing the Property, and BUYER accepts the Property in its PRESENT, AS IS CONDITION. BUYER acknowledges and agrees that BUYER has caused its engineers, surveyors, and other professionals as may be deemed necessary in BUYER'S opinion to investigate the Property making its decision to purchase the Property. 12. PERSONAL PROPERTY: Included in the purchase price are all fixed equipment owned by SELLER as now installed on the property and all personal property on the Property owned by SELLER. Such personal property will be conveyed by a bill of sale reasonably satisfactory to BUYER if requested by BUYER. 13. INDEMNITY: BUYER shall defend, hold harmless and indemnify SELLER from any and all claims, demands, causes of action or liability, costs and expenses (including reasonable attorney's fees and other litigation expenses) arising out of or in connection with BUYER'S ownership, occupancy or operation of the Property and improvements subsequent to the date of closing, including, without limitation, those arising out of or in connection with hazardous materials, substances or waste or BUYER's failure to comply with applicable federal, state and local environmental laws and regulations. The provisions of this paragraph 13 specifically shall survive the closing of the transaction contemplated by this Agreement. 14. DEFAULT AND ATTORNEYS FEES: If by reason of default by BUYER the transaction does not close as required under this Agreement, SELLER shall retain the Binder and Additional Deposits as agreed liquidated damages and in full settlement of any claim, whereupon BUYER and SELLER will be relieved of all obligations under this Agreement. If SELLER defaults under this Agreement, the BUYER shall, as its sole remedy, have the election to either (I) seek specific performance of this Agreement if (and only if) SELLER'S default is intentional and performance of this Agreement is within the reasonable control of SELLER, or (ii) to obtain a refund of the Binder and Additional Deposits, thereby waiving any action for specific performance. BUYER and SELLER waive all other remedies, including any claim for monetary damages, they may have against the other at law or in equity. In connection with any litigation arising out of this Agreement, the prevailing party, as determined by the court will be entitled to recover from the other party all costs incurred by the prevailing party, including without limitation a reasonable attorney's fee. 15. ASSIGNMENT: BUYER shall have the right to assign its interest in this Agreement to an assignee if that assignee is another form of legal entity of which BUYER has the entire ownership interest or control. BUYER shall provide SELLER with a copy of such 6 assignment, together with documents showing that such assignment complies with the requirements of this paragraph. Otherwise, this Agreement is not assignable by BUYER. 16. NOTICES: All notices required hereunder shall be in writing and shall be deemed to have been delivered personally when delivered, or three (3) days after delivery to the U.S. Postal Service when sent by registered or certified mail, return receipt requested, postage prepaid or the following business day when sent via nationally recognized overnight delivery service to a party at its address as hereinafter set forth: AS TO SELLER: Florida Rock Properties, Inc. ATTN: David H. DeVilliers, Jr. 34 Loveton Circle Sparks, MD 21152 AS TO BUYER: Florida Rock Industries, Inc. ATTN: John D. Baker, II and Scott McCaleb P.O. Box 4667 Jacksonville, FL 32201 17. IRC SECTION 1031 EXCHANGE: Upon and in accordance with request of SELLER, BUYER agrees to cooperate with SELLER in all reasonable respects in effecting for the benefit of said SELLER a simultaneous or delayed like-kind exchange of real property pursuant to Section 1031 of the United States Internal Revenue Code and the Treasury Regulations promulgated thereunder, provided that: (a) BUYER shall incur no material additional costs, expenses, or liabilities as a result of, or in connection with, the exchange; and (b) SELLER agrees to indemnify and hold BUYER harmless from any loss, costs or expenses caused solely by BUYER'S agreement to cooperate with the like-kind exchange contemplated in this paragraph 17. 18. MISCELLANEOUS: This Agreement when executed by all parties will be binding upon, enforceable by and inure to the benefit of BUYER, SELLER and their successors and permitted assigns. There are no other Agreements, promises or understandings between these parties except as specifically set forth in this Agreement. No alterations or changes will be made to this Agreement except in writing and signed or initialed by the parties in this Agreement. This Agreement shall not be construed more strongly against any party regardless of who is responsible for its preparation. The parties acknowledge that each contributed and is equally responsible for its preparation. If all or any portion of the provisions of this Agreement shall be declared invalid by laws applicable to this Agreement, such invalid portion shall be ineffective and unenforceable without invalidating the remaining portions of this Agreement. All captions and headings appearing are for convenience only and shall not be considered in 7 construing or giving effect to the provisions of this Agreement. This Agreement will be governed by the laws of the State of Maryland, without reference to its conflict of law rules and will not be recorded. TIME IS OF THE ESSENCE IN THIS AGREEMENT. 19. COUNTERPARTS: This Agreement may be executed in counterparts, each of which will be deemed an original document, but all of which will constitute a single document. This document will not be binding on or constitute evidence of a contract between the parties until such time as a counterpart of this document has been executed by each party and a copy thereof delivered to each other party to this Agreement. 20. NO JOINT VENTURE OR PARTNERSHIP: This Agreement is not intended nor shall it be construed to create a joint venture or partnership between the parties, and neither party shall constitute the agent of the other for any purpose. EXECUTION DATE OF THIS AGREEMENT IS _________________, 2003. SIGNED, SEALED AND DELIVERED in duplicate by duly authorized officers of each party and respective corporate seals affixed on the date stated. WITNESS: FLORIDA ROCK INDUSTRIES, INC. _____________________________ By:___________________________ Print Name Its: (Corporate Seal) WITNESS: MARYLAND ROCK INDUSTRIES, INC. _____________________________ By:___________________________ Print Name Its: (Corporate Seal) 8 WITNESS: FLORIDA ROCK PROPERTIES, INC. ______________________________ By:___________________________ Print Name Its: (Corporate Seal) 9 EXHIBIT A Current Properties in St. Mary's County, Maryland, held by Florida Rock Properties: PROPERTY KNOWN AS, 21475 Abell's Wharf Road, described and identified by the Maryland Department of Assessments and Taxation as Tax Map 48, Parcel 123, consisting of 117.799 acres, more or less, being all of that part of Tract that was conveyed by Maryland Rock Industries, Inc. to Florida Rock Properties by deed dated April 1, 1986, which Deed was recorded June 27, 1986, among the Land Records of St. Mary's County, Maryland in Liber MRB, 294, at Folio 177, better described in such deed as Greenwell Parcel 5. BEING PART OF THE SAME - Abells Wharf Road, described and identified by the Maryland Department of Assessments and Taxation as Tax Map 48, Parcel 252, consisting of .0.623 acres, more or less, being all of that part of Tract that was conveyed by Maryland Rock Industries, Inc. to Florida Rock Properties by deed dated April 1, 1986, which Deed was recorded June 27, 1986, among the Land Records of St. Mary's County, Maryland in Liber MRB, 294, at Folio 177, better described in such deed as Greenwell Parcel 5 "B." ALSO BEING PART OF THE SAME property conveyed 0.623 acres, more or less, to Florida Rock Properties, Inc. from Judith A. Clarke and Lovers Point, Inc., a Maryland Corporation, by Quit Claim Deed dated August 7, 1997, which Deed was recorded on February 24, 1998 among the Land Records of St. Mary's County, Maryland in Liber EWA 1247, at Folio 214. SAVING AND EXCEPTING THAT PART OF THE SAME property from Florida Rock Properties, Inc. conveying 0.14 acres, more or less, to the Board of County Commissioners of St. Mary's County, Maryland, by Quit Claim Deed dated December 14, 1998, which Deed was recorded on January 12, 1999 among the Land Records of St. Mary's County, Maryland in Liber 1373 at folio 005. SAVING AND EXCEPTING deed of easement consisting of 3.0 acres, more or less, from Florida Rock Properties to Board of County Commissioners, which Deed was recorded on November 30, 1998 among the Land Records of St. Mary's County, Maryland in Liber EWA 1354 at Folio 510. PROPERTY KNOWN AS, R/S Breton Bay Road, described and identified by the Maryland Department of Assessments and Taxation as Tax Map 48, Parcel 7, consisting of 156.345 acres, more or less, being all of that part of Tract that was conveyed by Maryland Rock Industries, Inc. to Florida Rock Properties by Deed dated April 1, 1986, which Deed was recorded June 27, 1986, among the Land Records of St. Mary's County, Maryland in Liber MRB, 294, at Folio 177, better described in such deed as Green Acres Parcel 3. PROPERTY KNOWN AS, 41709 Breton Beach Road, described and identified by the Maryland Department of Assessments and Taxation as Tax Map 48, Parcel 64, consisting of 306.491 acres, more or less, being all of that part of Tract that was conveyed by Maryland Rock Industries, Inc. 10 to Florida Rock Properties by Deed dated April 1, 1986, which Deed was recorded June 27, 1986, among the Land Records of St. Mary's County, Maryland in Liber MRB, 294, at Folio 177, better described in such Deed as Bell Parcel 2. PROPERTY KNOWN AS, Breton Beach Road, described and identified by the Maryland Department of Assessments and Taxation as Tax Map 48, Parcel 177, being all of that part of Tract that was conveyed by Maryland Rock Industries, Inc. to Florida Rock Properties by Deed dated April 1, 1986, which Deed was recorded June 27, 1986, among the Land Records of St. Mary's County, Maryland in Liber MRB, 294, at Folio 177; ALSO PART OF THE SAME property conveyed from John S and Ella L Mattingly to Maryland Rock Industries, Inc. which Deed was recorded on December 23, 1981 among the Land Records of St. Mary's County, Maryland in Liber MRB, 110, at Folio 250 and Liber MRB 291, at Folio 372; including also the PROPERTY KNOWN AS, 41645 Breton Beach Road, described and identified by the Maryland Department of Assessments and Taxation as Tax Map 48, Parcel 14, consisting of 5.0 acres, more or less. PROPERTY KNOWN AS, Medley Creek, described and identified by the Maryland Department of Assessments and Taxation as Tax Map 48, Parcel 188, consisting of 100.0 acres, more or less, being all of that part of Tract that was conveyed by Maryland Rock Industries, Inc. to Florida Rock Properties by Deed dated April 1, 1986, which Deed was recorded June 27, 1986, among the Land Records of St. Mary's County, Maryland in Liber MRB, 294, at Folio 177, better described in such Deed as Drury parcel 4. ALSO PART OF THE SAME property conveyed from James J. Drury to Maryland Rock Industries, Inc. which Deed was recorded on May 26, 1982, among the Land Records of St. Mary's County, Maryland in Liber MRB, 118, at Folio 88; including 0.76 acres, more or less, conveyed from Medley Neck Limited to Florida Rock Properties pursuant to Deed dated July 6, 1992, which Deed was recorded on October 5, 1992 among the Land Records of St. Mary's County, Maryland in Liber 715, at Folio 352. SAVING AND EXCEPTING 0.85 acres, more or less, conveyed by Florida Rock Properties to Medley Neck Limited as an exchange dated July 6, 1992, which Deed was recorded on October 5, 1992 among the Land Records of St. Mary's County, Maryland in Liber 715, Folio 355. 11 EX-11 4 juneeps.txt Exhibit 11 PATRIOT TRANSPORTATION HOLDING, INC. COMPUTATION OF EARNINGS PER COMMON SHARE (UNAUDITED) THREE MONTHS NINE MONTHS ENDED JUNE 30, ENDED JUNE 30, 2002 2003 2002 2003 Net income $1,346,000 1,577,000 2,906,000 4,347,000 Common shares: Weighted average shares outstanding during the period - shares used for basic earnings per share 3,014,686 3,145,005 3,067,117 3,141,031 Shares issuable under stock options which are poten- tially dilutive 39,501 32,956 31,298 24,509 Shares used for diluted earnings per share 3,054,187 3,177,961 3,098,415 3,165,540 Basic earnings per common share $.45 .50 .95 1.38 Diluted earnings per common share $.44 .50 .94 1.37 1 EX-31 5 juneja.txt CERTIFICATIONS Exhibit 31(a) I, John E. Anderson, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Patriot Transportation Holding, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosures controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial report; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 7, 2003 /s/John E. Anderson President and Chief Executive Officer EX-31 6 junervl.txt CERTIFICATIONS Exhibit 31(b) I, Ray M. Van Landingham, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Patriot Transportation Holding, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosures controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial report; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 7, 2003 /s/Ray M. Van Landingham Vice President, Finance and Administration and Chief Financial Officer EX-31 7 junegl.txt CERTIFICATIONS Exhibit 31(c) I, Gregory B. Lechwar, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Patriot Transportation Holding, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls to be designed under our supervision, ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosures controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial report; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: August 7, 2003 /s/Gregory B. Lechwar Controller and Chief Accounting Officer EX-32 8 junecert.txt Exhibit 32 CERTIFICATION OF CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER AND CHIEF ACCOUNTING OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 The undersigned individuals certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that this periodic report of Patriot Transportation Holding, Inc. on Form 10-Q for the quarter ended June 30, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities exchange Act of 1934 and that the information contained in such periodic report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Patriot Transportation Holding, Inc. August 7, 2003 PATRIOT TRANSPORTATION HOLDING, INC. JOHN E. ANDERSON John E. Anderson President and Chief Executive Officer RAY M. VAN LANDINGHAM_ Ray M. Van Landingham Vice President Finance & Administration and Chief Financial Officer GREGORY B. LECHWAR Gregory B. Lechwar Controller and Chief Accounting Officer A signed original of this written statement required by Section 906 has been provided to Patriot Transportation Holding, Inc. and will be retained by Patriot Transportation Holding, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. The foregoing certification accompanies the issuer's Quarterly report on Form 10-Q and is not filed as provided in SEC Release Nos. 33-8212, 34-4751 and IC-25967, dated June 30, 2003. 1 -----END PRIVACY-ENHANCED MESSAGE-----