Patriot Transportation Holding Inc. last week announced it is considering a plan to split into two companies, an idea that seems like a long time in coming.
Actually, it's an idea that's 14 years old. The Jacksonville-based transportation and real estate company first explored this in 1999 but announced a year later that it was putting off the split for a year or more. It waited a long time.
It seemed like a good idea 14 years ago and it's still a good idea today, because Patriot operates two very distinct businesses. The real estate company develops commercial properties mainly in the Baltimore-Washington-Northern Virginia market, as well as Jacksonville. The transportation company provides trucking services mainly for petroleum companies in the Southeast.
Patriot was formed in 1986 as a spinoff from Jacksonville-based Florida Rock Industries Inc. The construction materials company decided to separate its ancillary trucking and real estate operations to focus on its main business.
The spinoff company originally was named Florida Rock & Tank Lines Inc. but changed the name to FRP Properties Inc. in 1989.
FRP changed its name to Patriot in March 2000 in anticipation of the split into two companies, with plans to use the FRP name for the real estate company. However, in August 2000, the company announced it was delaying the split because of turbulent conditions in the trucking industry and the need to complete an internal information system for its transportation group.
The trucking industry seems to permanently be in a state of turbulence — just last week, one analyst downgraded Jacksonville's other publicly traded trucking company, Landstar System Inc., because of industry conditions (more on that later). However, Patriot officials apparently think this is a better time to consider a split of its businesses.
The transportation operations are Patriot's biggest business, accounting for $53.8 million of the company's total revenue of $66.9 million in the first six months of this fiscal year.
Developed property rentals produced $10.5 million in revenue and Patriot's mining royalties segment produced $2.6 million.
The mining royalties business, consisting of land used by other companies to mine construction materials, seems likely to be part of the real estate business if Patriot splits into two.
Like Florida Rock before it, Patriot is controlled by the Baker family, which owns about 30 percent of its stock. CEO Thompson Baker II is the grandson of Florida Rock founder Thompson Baker.
The Bakers controlled 25 percent of Florida Rock's stock before that company was sold to Vulcan Materials Co. in 2007.
Patriot said in a brief news release Wednesday it has retained Raymond James & Associates to assist its board of directors in exploring plans to split into two. It gave no other details.
ParkerVision shareholder upset with proposals
ParkerVision Inc. has come under attack from short sellers at various times over the years, as investors wait to see if the Jacksonville-based company's wireless technology will ever bear fruit.
Despite the fact that ParkerVision has never made a profit in 20 years as a public company, actual stockholders rarely have spoken out against the company, at least until now.
Last week, one major shareholder sent a letter to other stockholders urging them to reject three proposals at the company's upcoming annual meeting, calling them "shareholder-unfriendly."
Daniel Lewis of Gem Investment Advisors, who controls 7.7 percent of ParkerVision's stock, said in his letter that "we are not looking to battle with the CEO or to be confrontational. Rather, we hope to define a new path upon which we can constructively work with management and the board to enhance long-term value for the company."
Lewis is opposing a proposal to amend the company's charter that would divide the board of directors into three classes with staggered terms of office, and a second proposal that would only allow directors to be removed for "cause."
Currently, the seven members of the board are up for re-election every year.
Lewis also is opposing a bonus plan for ParkerVision executives.
These proposals are "designed to insulate management and severely limit board accountability and shareholder rights under the pretense of protecting against an unwanted takeover," Lewis said in his letter.
Lewis is ParkerVision's second-largest shareholder behind investors Austin Marxe and David Greenhouse, who control 8.7 percent of the stock, according to the company's proxy statement. CEO Jeff Parker controls 3.8 percent.
Lewis said he met with Parker but could not convince him to alter the proposals. Still, the New Jersey investor is supporting the company.
"We invested in ParkerVision over seven years ago and despite many years of no apparent progress, have remained a passive shareholder of the company. We have never publicly expressed discontent with the company" before last week's letter, he said.
"Despite our current discontent stemming from the shareholder-unfriendly proposals, we believe there is significant value in the company that is not currently reflected in the share price. We even commend the management team for having invented what appears to be seminal intellectual property, for discovering the alleged patent infringement against Qualcomm Inc. and for working diligently to unlock the company's inherent value," he said.
ParkerVision is seeking hundreds of millions of dollars in a lawsuit, scheduled for trial in October, which alleges Qualcomm has illegally used ParkerVision's technology in its products.
A ParkerVision spokesman said by email last week that the company had no comment on Lewis' letter.
ParkerVision's annual shareholders' meeting is scheduled for July 10 in Celebration, in Central Florida.
Wells Fargo analyst downgrades Landstar
Returning to Landstar, Wells Fargo analyst Anthony Gallo last week downgraded the trucking company from "outperform" to "market perform" as he lowered his earnings estimates for "non-asset based" transportation companies.
Landstar doesn't own trucks but contracts with drivers who own their own trucks to transport freight, so it is considered a non-asset based company.
"Following rather disappointing first-quarter 2013 earnings reports, the non-asset based transportation stocks in our universe have underperformed asset-based peers and the broader market," Gallo said in his report.
"Valuations on these non-asset based companies are at the low end of historical ranges. Nonetheless, we have downgraded our investment ratings because we believe competitive dynamics have become less attractive," he said.
Landstar's stock fell by $1.06 to $50.58 last Monday after Gallo's report, its lowest level since December.
Analyst downgrades LPS
BTIG analyst Mark Palmer last week downgraded Lender Processing Services Inc. from "buy" to "neutral," but he said the downgrade is not a statement on Fidelity National Financial Inc.'s proposed buyout of LPS.
Palmer initiated coverage of LPS in March with a price target of $31, at a time when the stock was trading at about $25.
"We had argued in our initiation report on March 26 that LPS's attractiveness as a buyout target merited a fuller valuation," Palmer said in his research note.
"We emphasize that our downgrade does not reflect any view on whether the FNF-LPS deal will be consummated, but rather represents a bit of housekeeping after our thesis was borne out and our price target achieved," he said.
Fidelity last month agreed to buy LPS for $33.25 a share in cash and stock. The announcement of that deal has increased LPS' market price above $31.
The merger agreement between the two Jacksonville-based companies includes a "go-shop" provision that allows LPS to seek higher offers through this weekend. Although some analysts have speculated that a higher bid could come in or that Fidelity may increase its offer, nothing has happened so far.
Delaney joins Jacksonville Bancorp board
Three days after its CEO resigned, Jacksonville Bancorp Inc. announced three new independent directors are joining its board, including University of North Florida President and former Jacksonville Mayor John Delaney.
The company also added banking industry veterans Terrie Spiro of Amelia Island and William Klich of Tampa to the board.
Interestingly, Jacksonville Bancorp issued a news release Thursday to announce the new board members, but never issued a release announcing the resignation of President and CEO Stephen Green. The company said in Securities and Exchange Commission filing Tuesday that Green had resigned the previous day.
The company said in another SEC filing Thursday that Green will receive $450,000 in severance pay, equal to 18 months of his base salary.
Stein's salary unchanged as CEO
Stein Mart Inc. said in an SEC filing last week that Jay Stein will receive the same compensation as chief executive officer as he did as interim CEO of the Jacksonville-based fashion retailer.
Stein had been serving as interim CEO since David Stovall resigned in September 2011, while the company searched for a replacement. However, Stein told the Daily Record two weeks ago that the company was removing the "interim" tag and making him CEO for the foreseeable future.
According to last week's SEC filing, Stein will receive the same base salary of $553,200 he received as interim CEO last year. He does not have an employment agreement with the company.
Stein's total compensation package of $1.47 million in 2012 actually was lower than the other three highest-ranking executives at Stein Mart, according to the company's annual proxy statement. The other executives received stock and option awards, which Stein did not receive.
Stein already owns 15.2 million shares of Stein Mart stock, or 34.7 percent of the shares outstanding.
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