The St. Joe Company (NYSE:JOE) (the “Company”) today announced
Net Income for the first quarter of 2017 of $4.4 million, or $0.06
per share, compared with Net Income of $8.7 million, or $0.12 per
share, for the first quarter of 2016.
First quarter update includes:
- Total revenue for the quarter was $13.2
million as compared to $20.3 million in the first quarter of 2016
primarily due to a reduction in real estate revenue. The Company’s
real estate revenue tends to vary from period to period depending
on a variety of factors including the communities where homesites
are available to be sold, as prices vary significantly by
community. In addition, the Company’s recent focus has been on
homebuilders who generally purchase more homesites in a single
transaction but tend to buy on a more sporadic basis. The first
quarter decrease in real estate revenue was due to the timing of
builder contractual obligations and the timing of development of
finished lots in the primary residential communities. The Company
is investing in the development of residential lots in its
WaterSound Origins, Breakfast Point and SouthWood communities. The
Company anticipates that a majority of the lots currently under
development will be available for sale later in 2017. In addition,
the first quarter of 2016 included a $3.4 million unimproved land
sale with a gross profit of $3.3 million due to a low historic
basis.
- The Company’s leasing segment includes
approximately 604,000 of net rentable square feet which was 86%
leased as of March 31, 2017, compared to approximately 589,000 of
net rentable square feet which was 84% leased as of March 31, 2016.
Subsequent to the first quarter of 2017, the Company completed the
purchase of two office buildings in Panama City Beach, Florida
totaling over 67,000 rentable square feet. This transaction is
reflective of the Company’s strategy to increase the size and scope
of its leasing portfolio while choosing to sell commercial property
selectively.
- Investment income for the three months
ended March 31, 2017 totaled $10.4 million as compared to $2.7
million for the three months ended March 31, 2016. The increase of
$7.7 million in the first quarter of 2017 was due to increased
interest income and dividend income as a result of changes in the
Company’s investment portfolio and a sale of investments at a
realized gain of $3.1 million. Other income for the first quarter
of 2017 totaled $4.0 million as compared to $13.0 million in the
first quarter of 2016. Other income for the first quarter of 2017
included $3.5 million from an insurance settlement. By comparison,
the first quarter of 2016 included $12.5 million from settlement of
claims related to the Deepwater Horizon oil spill.
- As of March 31, 2017, the Company had
cash, cash equivalents and investments of $392.6 million, as
compared to $416.8 million as of December 31, 2016, a decrease of
$24.2 million. The decrease was related to the $34.2 million of
cash used for stock repurchases, offset by net receipts from the
Company’s operations and other activities.
Jorge Gonzalez, the Company’s President and Chief Executive
Officer, said “We remain focused on our previously discussed
strategy of increasing the size and scope of our leasing portfolio
with the acquisition of the two Beckrich office buildings adding
over 67,000 square feet of leasable space to our existing
portfolio.” Mr. Gonzalez added, “We believe that the recent
announcements of GKN Aerospace choosing to locate in
VentureCrossings and our joint venture with HomeCorp for 240
apartment units, as well as the other investments we are making in
our club and resort operations are all consistent with our plan to
create long term value for our shareholders.”
FINANCIAL DATA
Consolidated Results
($ in millions except share and per share
amounts)
Quarter
Ended
March
31,
2017
2016
Revenue Real estate revenue $1.5
$7.1 Resorts and leisure revenue 8.1 8.7
Leasing revenue 2.4 2.4 Timber revenue
1.2
2.1
Total revenue
13.2
20.3
Expenses Cost of real estate revenue
0.3 1.8 Cost of resorts and leisure revenue
8.8 9.3 Cost of leasing revenue 0.7 0.8 Cost
of timber revenue 0.2 0.2 Other operating and
corporate expenses 6.2 6.8 Depreciation, depletion
and amortization 1.9 2.3 Total expenses
18.1
21.2
Operating loss
(4.9)
(0.9)
Investment income, net 10.4 2.7 Interest expense
(3.0) (3.0) Other, net
4.0
13.0
Income before income taxes
6.5
11.8
Income tax expense
(2.3)
(3.2)
Net income
4.2
8.6
Net loss attributable to non-controlling interest
0.2
0.1
Net income attributable to the Company
4.4
8.7
Net income per share
$0.06
$0.12
Weighted average shares outstanding 73,970,407
74,809,010
Revenue Detail
($ in millions)
Quarter
Ended
March
31,
2017
2016
Revenue: Real estate revenue
Residential $1.3 $7.0 Other real
estate revenue
0.2
0.1
Total real estate revenue 1.5 7.1 Resorts and leisure
revenue 8.1 8.7 Leasing revenue 2.4 2.4
Timber revenue
1.2
2.1
Total revenue
$13.2
$20.3
Summary Balance Sheet ($ in millions)
March 31,
2017
December 31,
2016
Assets Investment in real
estate, net $322.1 $314.6 Cash and cash equivalents
217.0 241.1 Investments 175.6 175.7
Restricted investments 4.4 5.6 Income tax receivable
26.7 27.1 Claim settlement receivable 7.9
7.8 Other assets 36.5 38.4 Property and
equipment, net 9.0 9.0 Investments held by special
purpose entities
208.2
208.6
Total assets
$1,007.4
$1,027.9
Liabilities and Equity
Debt $55.5 $55.0 Other
liabilities 47.7 41.0 Deferred tax liabilities
70.3 68.8 Senior Notes held by special purpose entity
176.4
176.3
Total liabilities
349.9
341.1
Total equity
657.5
686.8
Total liabilities and equity
$1,007.4
$1,027.9
Debt Schedule ($ in millions)
March 31,
2017
December 31,
2016
Pier Park North joint venture refinanced loan $47.3
$47.5 Community Development District debt 7.7 7.5
Construction loan
0.5
--
Total debt
$55.5
$55.0
Other Operating and Corporate Expenses ($
in millions)
Quarter
Ended
March
31,
2017
2016
Employee costs $1.8 $1.7 401(k) contribution
1.2 1.4 Property taxes and insurance 1.4 1.5
Professional fees 1.0 1.4 Marketing and owner
association costs 0.4 0.3 Occupancy, repairs and
maintenance 0.1 0.2 Other
0.3
0.3
Total other operating and corporate expenses
$6.2
$6.8
Additional Information and Where to
Find It
Additional information with respect to the Company’s results for
the first quarter of 2017 will be available in a Form 10-Q that
will be filed with the Securities and Exchange Commission.
Important Notice Regarding
Forward-Looking Statements
This press release includes forward-looking statements,
including statements regarding our expectations with respect to the
timing of residential lot sales, our strategy to increase our
leasing portfolio while selectively selling commercial property and
our beliefs regarding the ability of our prospects, strategy and
other actions to create long term shareholder value. The Company
wishes to caution readers that certain important factors may have
affected and could in the future affect the Company’s actual
results and could cause the Company’s actual results for subsequent
periods to differ materially from those expressed in any
forward-looking statement made by or on behalf of the Company,
including (1) any changes in our strategic objectives and our
ability to successfully implement such strategic objectives; (2)
any potential negative impact of our longer-term property
development strategy, including loss and negative cash flows for an
extended period of time if we continue with the self-development of
our entitlements; (3) significant decreases in the market value of
our investments in securities or any other investments; (4) our
ability to capitalize on strategic opportunities presented by a
growing retirement demographic; (5) our ability to accurately
predict market demand for the range of potential residential and
commercial uses of our real estate, including our Bay-Walton Sector
holdings; (6) volatility in the consistency and pace of our
residential real estate revenue; (7) economic or other conditions
that affect the future prospects for the Southeastern region of the
United States and the demand for the Company’s products, including
a slowing of the population growth in Florida, inflation, or
unemployment rates or declines in consumer confidence or the demand
for, or the prices of, housing; (8) any downturns in real estate
markets in Florida or across the nation; (9) our dependence on the
real estate industry and the cyclical nature of our real estate
operations; (10) our ability to successfully and timely obtain land
use entitlements and construction financing, maintain compliance
with state law requirements and address issues that arise in
connection with the use and development of our land, including the
permits required for mixed-use and active adult communities; (11)
our ability to enter into a lease with GKN Aerospace on favorable
terms or at all; (12) our ability to realize the anticipated
benefits of our recent acquisitions, joint ventures, investments in
leasable spaces and operations, and share repurchases; (13) our
ability to carry out our stock repurchase program in accordance
with applicable securities laws; (14) the impact of natural or
man-made disasters or weather conditions, including hurricanes and
other severe weather conditions, on the Company’s business; (15)
changes in laws, regulations or the regulatory environment
affecting the development of real estate; (16) our ability to
effectively deploy and invest our assets, including our
available-for-sale securities; (17) our ability to effectively
manage our real estate assets, as well as the ability of our joint
venture partner to effectively manage the day-to-day activities of
the Pier Park North joint venture; (18) increases in operating
costs, including costs related to real estate taxes, owner
association fees, construction materials, labor and insurance, and
our ability to manage our cost structure; and (19) potential
liability under environmental or construction laws, or other laws
or regulations; as well as, the cautionary statements and risk
factor disclosures contained in the Company’s Securities and
Exchange Commission filings including the Company’s Annual Report
on Form 10-K filed with the Commission on March 2, 2017 as updated
by subsequent Quarterly Reports on Form 10-Qs and other current
report filings.
About The St. Joe
Company
The St. Joe Company together with its consolidated subsidiaries
is a real estate development, asset management and operating
company concentrated primarily between Tallahassee and Destin,
Florida. More information about the Company can be found on its
website at www.joe.com.
© 2017, The St. Joe Company. “St. Joe®”, “JOE®”, the “Taking
Flight” Design®, “St. Joe (and Taking Flight Design)®” are
registered service marks of The St. Joe Company.
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version on businesswire.com: http://www.businesswire.com/news/home/20170504006679/en/
St. JoeInvestor Relations Contact:Marek Bakun,
1-866-417-7132Chief Financial OfficerMarek.Bakun@Joe.Com
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