The St. Joe Company (NYSE: JOE) (the “Company”) today announced
Net Income for the fourth quarter of 2017 of $38.5 million, or
$0.58 per share, compared with Net Income of $2.7 million, or $0.04
per share, for the fourth quarter of 2016. The fourth quarter of
2017 includes the previously announced sale of the Company’s short
term vacation rental management business, which resulted in a net
gain of $9.8 million recorded in Other income, net of expenses. In
addition, the 2017 fourth quarter results include a one-time credit
of $33.5 million to re-measure the Company’s net deferred tax
liability as a result of the Tax Cuts and Jobs Act enacted into law
on December 22, 2017, which reduced the Company’s federal statutory
tax rate from 35% to 21% as of January 1, 2018.
For the full year ended December 31, 2017, the Company reported
Net Income of $59.5 million, or $0.84 per share compared to Net
Income of $15.9 million, or $0.21 per share for the full year 2016.
The 2017 full year results include the sale of the short term
vacation rental business, the tax credit and $26.8 million of net
investment income from available for sale securities, while the
2016 full year results include $12.5 million in legal settlement
income and $9.2 million of net investment income from available for
sale securities.
Fourth Quarter 2017 update includes:
- Total revenue for 2017 was $21.5
million as compared to $18.7 million in 2016 due to increases in
real estate, leasing and timber, partially offset by a decrease in
resorts and leisure.
- Real estate revenue increased to $8.3
million in 2017 as compared to $5.4 million in 2016. This increase
was primarily related to the higher volume of lot sales in the
Watersound Origins and Breakfast Point communities.
- Resorts and leisure revenue decreased
in 2017 as compared to 2016. This decrease is due primarily to
reduced vacation rental inventory based on management’s decision to
focus on higher yielding homes prior to the sale of the short term
vacation rental management business in December 2017. The clubs
component of this segment’s revenue continues to climb due to
increased membership revenue from The Clubs by Joe, the Company’s
private membership club.
As of December 31, 2017, the Company owned approximately 814,000
square feet of rentable commercial space, an increase of 35% from
prior year period. The Company’s overall lease occupancy percentage
remained constant at 87% for each of December 31, 2017 and
2016.
Other operating and corporate expenses declined in 2017 as
compared to 2016. For the full year 2017, the operating and
corporate expenses represented 20.6% of revenue compared to 24.0%
in 2016. The Company continues to focus on a cost discipline to
support bottom line performance.
As of December 31, 2017, the Company had cash, cash equivalents
and investments of $303.4 million, as compared to $416.8 million as
of December 31, 2016, a decrease of $113.4 million. During the
twelve months ended December 31, 2017, the Company used $147.4
million to repurchase a total of 8,450,294 shares of its common
stock. As of December 31, 2017, the Company had approximately 65.9
million shares of its common stock outstanding.
Financial data schedules in the back of this press release
provide greater detail on business segment performance, summarizing
the consolidated results, summary balance sheets, debt schedule and
other operating and corporate expenses for both the fourth quarter
and full year 2017 and 2016 periods.
Jorge Gonzalez, the Company’s President and Chief Executive
Officer, said, “We are pleased with our fourth quarter and full
year 2017 results and expect positive momentum to continue into
2018. We are implementing our stated business strategy of
increasing recurring revenue, focusing on developing scalable
residential communities, expanding the scope of clubs and resorts
assets, collaboratively working on strategic infrastructure
initiatives and working on partnerships and joint ventures, all
while maintaining efficient operations, liquidity and balance sheet
strength. We built the 138,605 square foot building for our tenant,
GKN Aerospace, which is already in the process of creating quality
aerospace manufacturing jobs in our area. We completed the sale of
the short term vacation rental management business in order to
focus on new opportunities, such as our recent announcement of a
joint venture for the development of a new hotel project in Panama
City Beach to advantageously position ourselves to capitalize on a
changing lodging marketplace.” Mr. Gonzalez added, “As we look
forward to 2018, we expect to start several new projects that have
been in the planning stage and therefore we anticipate our capital
expenditures to increase commensurately. The new projects are
expected to be focused on our commercial leasing, residential
development and clubs and resorts assets.”
FINANCIAL DATA Consolidated
Results ($ in millions except share and per share
amounts)
Quarter Ended
December 31,
Year Ended
December 31,
2017
2016
2017
2016
Revenue
Real estate revenue
$ 8.3 $ 5.4
$ 27.7 $ 23.4 Resorts and leisure
revenue 9.2
9.7 54.8
57.3 Leasing revenue 2.7
2.4 10.7
9.8 Timber revenue
1.3
1.2
5.6
5.2
Total revenue $ 21.5
$ 18.7 $ 98.8 $
95.7 Expenses
Cost of real
estate revenue 5.0
1.3 15.4
8.0 Cost of resorts and leisure revenue
9.6 9.8
47.8 50.2 Cost of
leasing revenue 0.9
0.9 3.2
3.1 Cost of timber revenue
0.2 0.2
0.8 0.8 Other
operating and corporate expenses 5.1
5.3 20.4
23.1 Depreciation, depletion and
amortization
2.6
2.1
8.9
8.6
Total expenses
23.4
19.6
96.5
93.8
Operating (loss) income
(1.9
)
(0.9
)
2.3
1.9
Investment income, net 4.3
7.4 35.4
17.8 Interest expense
(3.0 ) (3.0 )
(12.2 ) (12.3 ) Other income,
net
10.2
1.1
15.8
15.2
Income before income taxes 9.6
4.6 41.3
22.6 Income tax benefit
(expense)
28.7
(2.0
)
17.9
(7.1
)
Net income
38.3
2.6
59.2
15.5
Net loss attributable to non-controlling interest
0.2 0.1
0.3 0.4 Net
income attributable to the Company
$
38.5
$
2.7
$
59.5
$
15.9
Net income per share attributable to the Company
$ 0.58
$ 0.04
$ 0.84
$ 0.21 Weighted average shares
outstanding 66,128,895
74,342,826 70,548,411
74,457,541
Summary Balance
Sheet ($ in millions)
December
31, 2017 December 31,
2016 Assets
Investment in real estate, net $
332.6 $ 314.6 Cash and cash equivalents
192.1 241.1 Investments
111.3 175.7 Restricted
investments 4.5
5.6 Income tax receivable 8.4
27.1 Claim settlement receivable
5.3 7.8 Other assets
47.1 38.4 Property and
equipment, net 11.8
9.0 Investments held by special purpose entities
207.9
208.6
Total assets
$
921.0
$ 1,027.9
Liabilities and
Equity Debt
$ 55.6 $ 55.0 Other liabilities
47.3 41.0 Deferred
tax liabilities, net 49.0
68.8 Senior Notes held by special purpose entity
176.5
176.3
Total liabilities 328.4
341.1 Total equity
592.6
686.8
Total liabilities and equity
$
921.0 $
1,027.9
Debt Schedule ($ in millions)
December 31,
2017
December 31,
2016
Pier Park North joint venture loan $ 46.8
$ 47.5 Community Development District debt
7.2 7.5 Construction loan
1.6
--
Total debt
$ 55.6
$ 55.0
Other Operating and Corporate Expenses
($ in millions)
Quarter Ended
December 31,
Year Ended
December 31,
2017
2016
2017
2016
Employee costs $ 1.7 $ 1.8
$ 6.9 $ 7.1 401(k) contribution
-- --
1.2 1.4 Non-cash stock compensation
costs -- --
0.1 0.1 Property taxes and
insurance 1.1 1.3
5.2 5.6 Professional fees
0.7 1.2
2.9 5.0 Marketing and owner
association costs 0.5
0.5 1.5 1.5
Occupancy, repairs and maintenance 0.2
0.2 0.6
0.7 Other
0.9
0.3
2.0
1.7
Total other operating and corporate expense
$
5.1
$ 5.3
$ 20.4 $
23.1
Additional Information and Where to
Find It
Additional information with respect to the Company’s results for
the fourth quarter and full year 2017 will be available in a Form
10-K that will be filed with the Securities and Exchange
Commission, which can be found at the SEC’s website
www.sec.gov.
Important Notice Regarding
Forward-Looking Statements
Certain statements contained in this press release, as well as
other information provided from time to time by the Company or its
employees, may contain forward-looking statements that involve
risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. You can
identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. These statements
may include words such as “guidance,” “anticipate,” “estimate,”
“expect,” “forecast,” “project,” “plan,” “intend,” “believe,”
“confident,” “may,” “should,” “can have,” “likely,” “future” and
other words and terms of similar meaning in connection with any
discussion of the timing or nature of future operating or financial
performance or other events. Examples of forward-looking statements
in this press release include statements regarding the
implementation of our business strategy; our positive momentum
headed into 2018; increases in membership revenue from The Clubs by
Joe; our continued cost discipline to support bottom line
performance; our exploration of opportunities in a changing lodging
business in our local market; our joint venture for a new hotel
development; our anticipated capital expenditure increases in 2018
in order to grow recurring revenue from commercial leases,
residential apartments and hotels; and our continued maintenance of
low overhead expenses. Any such forward-looking statements are not
guarantees of performance or results, and involve risks,
uncertainties (some of which are beyond the Company’s control) and
assumptions.
The Company wishes to caution readers that, although we believe
any forward-looking statements are based on reasonable assumptions,
certain important factors may have affected and could in the future
affect the Company’s actual financial results and could cause the
Company’s actual financial 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 or our ability to successfully implement
such strategic objectives; (2) any potential negative impact of our
longer-term property development strategy, including losses and
negative cash flows for an extended period of time if we continue
with the self-development of recently granted 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 VentureCrossings holdings; (6)
volatility in the consistency and pace of our residential real
estate sales; (7) any downturns in real estate markets in Florida
or across the nation; (8) our dependence on the real estate
industry and the cyclical nature of our real estate operations; (9)
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; (10) changes in laws,
regulations or the regulatory environment affecting the development
of real estate; (11) our ability to effectively deploy and invest
our assets, including our available-for-sale securities; (12) 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; and
(13) 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; 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 for the
year ended December 31, 2017, which can be found at the SEC’s
website www.sec.gov. The discussion of these risks is specifically
incorporated by reference into this press release.
Any forward-looking statement made by us in this press release
speaks only as of the date on which it is made. We undertake no
obligation to update any forward-looking statement, whether as a
result of new information, future developments or otherwise, except
as may be required by law.
About The St. Joe
Company
The St. Joe Company together with its consolidated subsidiaries
is a real estate development, asset management and operating
company with real estate assets and operations currently
concentrated primarily between Tallahassee and Destin, Florida.
More information about the Company can be found on its website at
www.joe.com.
© 2018, The St. Joe Company. “St. Joe®”, “JOE®”, the “Taking
Flight” Design®, “St. Joe (and Taking Flight Design)®”, and
“VentureCrossings®” are registered service marks of The St.
Joe Company.
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version on businesswire.com: http://www.businesswire.com/news/home/20180301006332/en/
The St. Joe CompanyInvestor Relations Contact:Marek Bakun,
1-866-417-7132Chief Financial OfficerMarek.Bakun@Joe.Com
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