"Our board believes this is a very favorable transaction for our shareholders, customers and employees," Henriques said. "We will continue to work diligently to secure all the approvals needed for the merger."

Among other business discussed during the call, Henriques briefly addressed the merger agreement recently struck by FECI, the locally based owner of Flagler Development Group and Florida East Coast Railway, LLC, and Fortress.

FECI's board of directors unanimously approved the merger with Fortress and the deal is expected to close in the third quarter. Morgan Stanley acted as financial advisor to FECI. Greenberg Traurig, P.A. acted as legal advisor to FECI and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to Fortress, as GlobeSt.com previously reported.

For the first quarter, FECI reported consolidated revenues of $107.7 million, compared to $136.1 million for the first quarter 2006. Revenues declined primarily due to a decrease in land sales of $43.9 million and a decline in Railway revenue of $7.3 million, which were partially offset by a $23.1-million increase in revenues from Flagler's realty rental and services due to the acquisition of Codina's service businesses. FECI reported consolidated first quarter net income of $9 million, or 26 cents per diluted share, compared to $18.7 million, or 57 cents per diluted share, for the prior year quarter.

"Our first quarter results reflect the continued strong performance by Flagler in our office and industrial real estate markets while the Railway continues to be impacted by the weakness in the housing and domestic automobile markets," Henriques said. "We have responded to these challenges at the Railway by taking actions on the cost side of the business which will benefit the Railway's financial results for the balance of the year."