The St. Joe Company Reports Second Quarter 2018 Results
WATERSOUND, Fla.--(BUSINESS WIRE)--Aug. 1, 2018-- The
Second quarter update includes:
- Total revenue for the quarter was
$50.4 million as compared to$30.6 million in 2017 due to increases in real estate, leasing and timber revenue, partially offset by a decrease in resorts and leisure revenue. - Real estate revenue increased to
$32.1 million in 2018 as compared to$7.2 million in 2017. Of this increase,$23.1 million is attributable to the RiverTown impact fees receipt. The remaining increase of approximately$1.8 million was primarily related to an increase in the sale of mitigation bank credits and a higher volume of lot sales in the Watersound West Beach, RiverCamps, Wild Heron, SouthWood andBreakfast Point communities offset by a reduction in the SummerCamp community as well as a reduction in commercial real estate sales. The Watersound Origins community also experienced a reduction in revenue due to timing of builder lot takedowns. Overall, there were 37 homesites sold in the second quarter of 2018 compared to 32 homesites sold in the second quarter of 2017. Gross margin related to homesite sales increased to 58.8% for the second quarter of 2018 as compared to 56.1% for the second quarter of 2017. - Resorts and leisure revenue for the quarter decreased in 2018 as compared to 2017 by
$6.0 million primarily due to the sale of the short-term vacation rental management business duringDecember 2017 , partially offset by an increase in the clubs component. Costs of resorts and leisure revenue decreased by$5.1 million primarily due to the same sale of the short-term vacation rental management business. The clubs component of this segment’s revenue improved due to increased revenue from the Company’s private membership club. The clubs component revenue increased$0.9 million , or 20.9%, for the second quarter of 2018 as compared to the second quarter of 2017. - Timber revenue increased by
$0.6 million during the three months endedJune 30, 2018 , as compared to the same period in 2017. Gross margin for timber revenue increased during the three months endedJune 30, 2018 to 89.5% compared to 84.6% during the same period in 2017. - During the second quarter of 2018, the Company’s consolidated joint venture (
Pier Park Crossings, LLC ) entered into a new$36.6 million loan commitment for the construction of a previously announced 240-unit apartment complex in Panama City Beach. The loan, insured byU.S. Department of Housing and Urban Development (HUD), bears a fixed interest rate of 3.99% and matures onJune 1, 2060 . As ofJune 30, 2018 , there was$5.0 million drawn on this commitment. - The Company is benefiting from the reduced U.S. federal corporate income tax rate. For the three months ended
June 30, 2018 , the Company’s effective tax rate (combined federal and state) was 20.0% compared to 35.4% for the same period in 2017. The recorded income tax expense was$6.5 million for the three months endedJune 30, 2018 as compared to$5.9 million during the same period in 2017.
As of
The Company had cash, cash equivalents and investments of
Financial data schedules included in this press release provide greater detail on business performance, summarizing the consolidated results, summary balance sheets, debt schedule and other operating and corporate expenses for the second quarter of 2018 and 2017, respectively.
Mr. Gonzalez added, “Looking forward, our team recently submitted a Detailed Specific Area Plan (DSAP) to local authorities associated with Latitude Margaritaville, which, in conjunction with our joint venture partner, is expected to create a significant entry into to the active adult market with initial plans for approximately 3,000 residential units, community amenities, and other assets. Subject to completion of several processes with our joint venture partner, including executing a definitive joint venture agreement, we anticipate having the sales center and initial model homes open in 2020.”
Mr. Gonzalez continued, “During the quarter, we broke ground on a new 240-unit apartment complex located in close proximity to Pier Park. At the same time, the
Mr Gonzalez concluded, “These projects, as well as others we are currently planning, are expected to favorably impact our future growth.”
FINANCIAL DATA | |||||||||
Consolidated Results (Unaudited) | |||||||||
($ in millions except share and per share amounts) |
|||||||||
Quarter Ended June 30, |
Six Months Ended June 30, |
||||||||
2018 |
2017 |
2018 |
2017 |
||||||
Revenue | |||||||||
Real estate revenue | $32.1 | $7.2 | $39.9 | $8.7 | |||||
Resorts and leisure revenue | 13.3 | 19.3 | 20.7 | 27.4 | |||||
Leasing revenue | 3.1 | 2.8 | 6.1 | 5.4 | |||||
Timber revenue |
1.9 |
1.3 |
3.6 |
2.6 |
|||||
Total revenue |
50.4 |
30.6 |
70.3 |
44.1 |
|||||
Expenses | |||||||||
Cost of real estate revenue | 3.0 | 3.6 | 7.1 | 3.9 | |||||
Cost of resorts and leisure revenue | 9.8 | 14.9 | 16.8 | 23.7 | |||||
Cost of leasing revenue | 0.8 | 0.8 | 1.7 | 1.5 | |||||
Cost of timber revenue | 0.2 | 0.2 | 0.4 | 0.4 | |||||
Other operating and corporate expenses | 5.0 | 4.2 | 11.0 | 10.3 | |||||
Depreciation, depletion and amortization |
2.3 |
2.0 |
4.5 |
4.0 |
|||||
Total expenses |
21.1 |
25.7 |
41.5 |
43.8 |
|||||
Operating income |
29.3 |
4.9 |
28.8 |
0.3 |
|||||
Investment income, net | 6.0 | 14.3 | 9.6 | 24.7 | |||||
Interest expense | (2.9) | (3.0) | (5.9) | (6.1) | |||||
Other income, net |
0.2 |
0.3 |
0.5 |
4.1 |
|||||
Income before income taxes | 32.6 | 16.5 | 33.0 | 23.0 | |||||
Income tax expense |
(6.5) |
(5.9) |
(6.3) |
(8.2) |
|||||
Net income | 26.1 | 10.6 | 26.7 | 14.8 | |||||
Net loss attributable to non-controlling interest |
0.1 |
0.2 |
0.3 |
0.3 |
|||||
Net income attributable to the Company |
$26.2 |
$10.8 |
$27.0 |
$15.1 |
|||||
Net income per share attributable to the Company |
$0.41 |
$0.15 |
$0.42 |
$0.21 |
|||||
Weighted average shares outstanding | 63,760,022 | 71,981,505 | 64,613,298 | 72,970,462 | |||||
Summary Balance Sheet (Unaudited) | |||||
($ in millions) | |||||
June 30, 2018 |
December 31, 2017 |
||||
Assets | |||||
Investment in real estate, net | $339.5 | $332.6 | |||
Cash and cash equivalents | 215.1 | 192.1 | |||
Investments – debt securities | 14.2 | 76.3 | |||
Investments – equity securities | 38.8 | 35.0 | |||
Restricted investments | 3.4 | 4.5 | |||
Income tax receivable | 1.6 | 8.4 | |||
Claim settlement receivable | 5.4 | 5.3 | |||
Other assets | 46.4 | 47.1 | |||
Property and equipment, net | 11.7 | 11.8 | |||
Investments held by special purpose entities |
207.7 |
207.9 |
|||
Total assets |
$883.8 |
$921.0 |
|||
Liabilities and Equity | |||||
Debt, net | $59.2 | $55.6 | |||
Other liabilities | 49.3 | 47.3 | |||
Deferred tax liabilities, net | 49.1 | 49.0 | |||
Senior Notes held by special purpose entity |
176.6 |
176.5 |
|||
Total liabilities | 334.2 | 328.4 | |||
Total equity |
549.6 |
592.6 |
|||
Total liabilities and equity |
$883.8 |
$921.0 |
|||
Debt Schedule (Unaudited) | ||||
($ in millions – Net of issuance costs) | ||||
June 30, 2018 |
December 31, 2017 |
|||
Pier Park North joint venture refinanced loan | $46.4 | $46.8 | ||
Community Development District debt | 6.6 | 7.2 | ||
Pier Park Crossings joint venture loan | 3.9 | -- | ||
Pier park outparcel construction loan | 1.6 | 1.6 | ||
WaterColor Crossings construction loan |
0.7 |
-- |
||
Total debt, net |
$59.2 |
$55.6 |
||
Other Operating and Corporate Expenses (Unaudited) | |||||||||
($ in millions) | |||||||||
Quarter Ended June 30, |
Six Months Ended June 30, |
||||||||
2018 |
2017 |
2018 |
2017 |
||||||
Employee costs | $1.7 | $1.7 | $3.5 | $3.5 | |||||
401(k) contribution | -- | -- | 1.1 | 1.2 | |||||
Property taxes and insurance | 1.2 | 1.4 | 2.5 | 2.8 | |||||
Professional fees | 0.8 | 0.4 | 1.7 | 1.4 | |||||
Marketing and owner association costs | 0.3 | 0.3 | 0.6 | 0.6 | |||||
Occupancy, repairs and maintenance | 0.4 | 0.1 | 0.5 | 0.2 | |||||
Other |
0.6 |
0.3 |
1.1 |
0.6 |
|||||
Total other operating and corporate expense |
$5.0 |
$4.2 |
$11.0 |
$10.3 |
|||||
Additional Information and Where to Find It
Additional information with respect to the Company’s results for the second quarter 2018 will be available in a Form 10-Q that will be filed with the
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 our continued progress in our operations, expectations on timing and impact of the proposed Latitude Margaritaville project, the impact of the Pier Park Crossings apartment complex, future development of business initiatives at our
The Company cautions 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; (6) volatility in the consistency and pace of our residential real estate sales; (7) any downturns in real estate markets in
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
The
© 2018, The
View source version on businesswire.com: https://www.businesswire.com/news/home/20180801005771/en/
Source:
The St. Joe Company
Investor Relations Contact:
Marek Bakun, 1-866-417-7132
Chief Financial Officer
Marek.Bakun@Joe.Com