The St. Joe Company (NYSE: JOE) today announced a Net Loss for the second quarter ended June 30, 2010 of $(8.6) million, or $(0.09) per share, including a pre-tax restructuring charge of $1.2 million or $0.01 per share after tax. This compares to a Net Loss in the second quarter of 2009 of $(44.8) million, or $(0.49) per share, which included pre-tax non-cash charges of $64.7 million or $0.43 per share after tax.
Net Loss for the first half of 2010 was $(20.0) million, or $(0.22) per share. This compares to a Net Loss during the same period of 2009 of $(56.9) million, or $(0.62) per share, which included pre-tax non-cash charges of $66.2 million or $0.44 per share after tax.
Deepwater Horizon Incident
The Company is assessing the financial impact from the Deepwater Horizon incident in the Gulf of Mexico on its current and future business operations and prospects, and has retained legal counsel to direct the review and analysis of the various legal claims and remedies available to the Company. On August 4, 2010, St. Joe filed its first lawsuit seeking the recovery of damages in connection with the Deepwater Horizon incident. The assessment process and any resulting litigation are expected to continue for an extended period of time.
"In spite of the oil spill, we continue to focus on the long-term value of our land holdings," said St. Joe's President and CEO, Britt Greene. "Prior to the oil spill, we had seen momentum building in our operations; however, the oil spill has adversely impacted our markets and has created uncertainty about the future of the Gulf Coast region."
Segment Results
During the second quarter in its residential business, St. Joe accepted contracts on 20 homesites throughout its communities at an average price of $135,400. The Company also closed on 11 homesites at an average price of $109,000 in the resort communities of WaterColor and WaterSound West Beach in Walton County and five homesites at an average price of $56,700 in the primary community of Hawks Landing in Bay County.
As part of the Company's commercial focus, St. Joe launched VentureCrossings Enterprise Centre at West Bay during the second quarter. VentureCrossings encompasses the first 1,000 acres to be developed by St. Joe within the West Bay Sector Plan adjacent to the Northwest Florida Beaches International Airport. It includes 100 acres designated for retail, office and hotel uses, approximately 300 acres for light industrial uses, and approximately 600 acres for manufacturing, distribution and logistics uses.
Within VentureCrossings, site development has begun and construction is scheduled to begin this year on a Class-A office building that St. Joe will occupy as part of its previously announced corporate headquarters relocation.
The Company will also break ground this year on a light industrial building within VentureCrossings and has plans to develop an initial 300-space long-term covered parking facility at the entrance to the airport. The covered parking facility is expected to be operational by the spring of next year.
As the Company remains focused on selling smaller tracts rather than larger, contiguous acreage, St. Joe had limited rural land sales during the second quarter and generated $0.4 million from the sale of 42 acres at an average price of $9,482 per acre. The Company also generated $0.4 million from an easement transaction during the second quarter and recognized $0.4 million from previously deferred sales.
Forestry revenues during the second quarter were $7.8 million, an increase of $0.6 million from the second quarter of 2009, primarily due to the increased sales price per ton on sawtimber.
Northwest Florida Beaches International Airport
"The successful opening of the new airport has made the region more easily accessible to the rest of the country and the global marketplace," said Greene. "Although we remain concerned about the impact of the oil spill, we continue to believe the airport has the potential to greatly accelerate the positive transformation that is occurring in Northwest Florida and contribute to the economic prosperity the region will realize over the coming decades."
St. Joe and Southwest Airlines have entered into a strategic alliance agreement providing for low-fare air service to the new airport. As part of the three-year agreement which commenced on May 23, 2010, the Company has agreed to reimburse Southwest Airlines if it incurs losses on its service at the new airport. During the second quarter there was no required reimbursement payment to Southwest Airlines.
Balance Sheet
At June 30, 2010, St. Joe had cash of $138.9 million, pledged treasury securities of $26.2 million and debt of $38.9 million, $26.2 million of which is defeased debt. The Company's $125 million revolving credit facility remained undrawn at June 30, 2010. Subsequent to the end of the quarter, St. Joe received a $67.7 million tax refund from the United States Department of the Treasury.
"With our nearly debt-free balance sheet, efficient cost structure and more than 300,000 acres of land within 40 miles of the new airport, we have positioned the Company to take advantage of the increased economic activity that we expect to realize as a result of the opening of the new airport," said William S. McCalmont, St. Joe's Executive Vice President and CFO.
Capital expenditures for the first six months of 2010 were $6.0 million, compared to $9.4 million for the same period in 2009, a reduction of 36 percent. In addition, St. Joe incurred cash overhead costs of $11.9 million during the quarter, compared to $14.4 million for the second quarter last year, a 17 percent reduction.
Land Holdings and Land Use Entitlements
On June 30, 2010, St. Joe owned approximately 577,000 acres, concentrated primarily in Northwest Florida. Approximately 404,000 acres, or 70 percent of the Company's total land holdings, are within 15 miles of the coast of the Gulf of Mexico.
On June 30, 2010, St. Joe's land-use entitlements in hand or in process totaled approximately 31,600 residential units and approximately 11.6 million square feet of commercial space, as well as an additional 646 acres with land-use entitlements for commercial uses.
Conference Call Information
On August 5, 2010, at 10:30 a.m. (EDT), St. Joe will host a conference call to review the Company?s results for the second quarter ended June 30, 2010.
If you wish to participate in the call, please phone 888.208.1711 (for domestic calls) or 913.312.0411 (for international calls) approximately ten minutes before the scheduled start time. You will be asked for a Confirmation Code which is: 7910434. St. Joe will also webcast the conference call in a listen-only format on the Company?s website.
On the afternoon of the call, you may access a replay of the call by phoning 888.203.1112 (for domestic calls) or 719.457.0820 (for international calls) using access code 7910434. Access to the replay will be available until 11:59 PM (EDT) on August 9, 2010. A webcast archive of the conference call will be posted to the Company?s website approximately 90 minutes following the call and will be available until August 12, 2010.
Net Loss for the first half of 2010 was $(20.0) million, or $(0.22) per share. This compares to a Net Loss during the same period of 2009 of $(56.9) million, or $(0.62) per share, which included pre-tax non-cash charges of $66.2 million or $0.44 per share after tax.
Deepwater Horizon Incident
The Company is assessing the financial impact from the Deepwater Horizon incident in the Gulf of Mexico on its current and future business operations and prospects, and has retained legal counsel to direct the review and analysis of the various legal claims and remedies available to the Company. On August 4, 2010, St. Joe filed its first lawsuit seeking the recovery of damages in connection with the Deepwater Horizon incident. The assessment process and any resulting litigation are expected to continue for an extended period of time.
"In spite of the oil spill, we continue to focus on the long-term value of our land holdings," said St. Joe's President and CEO, Britt Greene. "Prior to the oil spill, we had seen momentum building in our operations; however, the oil spill has adversely impacted our markets and has created uncertainty about the future of the Gulf Coast region."
Segment Results
During the second quarter in its residential business, St. Joe accepted contracts on 20 homesites throughout its communities at an average price of $135,400. The Company also closed on 11 homesites at an average price of $109,000 in the resort communities of WaterColor and WaterSound West Beach in Walton County and five homesites at an average price of $56,700 in the primary community of Hawks Landing in Bay County.
As part of the Company's commercial focus, St. Joe launched VentureCrossings Enterprise Centre at West Bay during the second quarter. VentureCrossings encompasses the first 1,000 acres to be developed by St. Joe within the West Bay Sector Plan adjacent to the Northwest Florida Beaches International Airport. It includes 100 acres designated for retail, office and hotel uses, approximately 300 acres for light industrial uses, and approximately 600 acres for manufacturing, distribution and logistics uses.
Within VentureCrossings, site development has begun and construction is scheduled to begin this year on a Class-A office building that St. Joe will occupy as part of its previously announced corporate headquarters relocation.
The Company will also break ground this year on a light industrial building within VentureCrossings and has plans to develop an initial 300-space long-term covered parking facility at the entrance to the airport. The covered parking facility is expected to be operational by the spring of next year.
As the Company remains focused on selling smaller tracts rather than larger, contiguous acreage, St. Joe had limited rural land sales during the second quarter and generated $0.4 million from the sale of 42 acres at an average price of $9,482 per acre. The Company also generated $0.4 million from an easement transaction during the second quarter and recognized $0.4 million from previously deferred sales.
Forestry revenues during the second quarter were $7.8 million, an increase of $0.6 million from the second quarter of 2009, primarily due to the increased sales price per ton on sawtimber.
Northwest Florida Beaches International Airport
"The successful opening of the new airport has made the region more easily accessible to the rest of the country and the global marketplace," said Greene. "Although we remain concerned about the impact of the oil spill, we continue to believe the airport has the potential to greatly accelerate the positive transformation that is occurring in Northwest Florida and contribute to the economic prosperity the region will realize over the coming decades."
St. Joe and Southwest Airlines have entered into a strategic alliance agreement providing for low-fare air service to the new airport. As part of the three-year agreement which commenced on May 23, 2010, the Company has agreed to reimburse Southwest Airlines if it incurs losses on its service at the new airport. During the second quarter there was no required reimbursement payment to Southwest Airlines.
Balance Sheet
At June 30, 2010, St. Joe had cash of $138.9 million, pledged treasury securities of $26.2 million and debt of $38.9 million, $26.2 million of which is defeased debt. The Company's $125 million revolving credit facility remained undrawn at June 30, 2010. Subsequent to the end of the quarter, St. Joe received a $67.7 million tax refund from the United States Department of the Treasury.
"With our nearly debt-free balance sheet, efficient cost structure and more than 300,000 acres of land within 40 miles of the new airport, we have positioned the Company to take advantage of the increased economic activity that we expect to realize as a result of the opening of the new airport," said William S. McCalmont, St. Joe's Executive Vice President and CFO.
Capital expenditures for the first six months of 2010 were $6.0 million, compared to $9.4 million for the same period in 2009, a reduction of 36 percent. In addition, St. Joe incurred cash overhead costs of $11.9 million during the quarter, compared to $14.4 million for the second quarter last year, a 17 percent reduction.
Land Holdings and Land Use Entitlements
On June 30, 2010, St. Joe owned approximately 577,000 acres, concentrated primarily in Northwest Florida. Approximately 404,000 acres, or 70 percent of the Company's total land holdings, are within 15 miles of the coast of the Gulf of Mexico.
On June 30, 2010, St. Joe's land-use entitlements in hand or in process totaled approximately 31,600 residential units and approximately 11.6 million square feet of commercial space, as well as an additional 646 acres with land-use entitlements for commercial uses.
Conference Call Information
On August 5, 2010, at 10:30 a.m. (EDT), St. Joe will host a conference call to review the Company?s results for the second quarter ended June 30, 2010.
If you wish to participate in the call, please phone 888.208.1711 (for domestic calls) or 913.312.0411 (for international calls) approximately ten minutes before the scheduled start time. You will be asked for a Confirmation Code which is: 7910434. St. Joe will also webcast the conference call in a listen-only format on the Company?s website.
On the afternoon of the call, you may access a replay of the call by phoning 888.203.1112 (for domestic calls) or 719.457.0820 (for international calls) using access code 7910434. Access to the replay will be available until 11:59 PM (EDT) on August 9, 2010. A webcast archive of the conference call will be posted to the Company?s website approximately 90 minutes following the call and will be available until August 12, 2010.
