The St. Joe Company Reports First Quarter 2020 Results | The St. Joe Company
The St. Joe Company (NYSE: JOE) (the “Company”) today announced revenue for the first quarter of 2020 increased 16% to $18.6 million as compared to $16.0 million for the first quarter of 2019. Net loss and loss per share was ($1.5) million, or ($0.03) per share, compared with net income of $2.0 million, or $0.03 per share, for the same period in 2019. The first quarter earnings were impacted by COVID-19 and associated travel restrictions and shutdowns to the Company’s hospitality operations. Also, the Company reported a total investment loss of ($1.6) million for the first quarter of 2020 as compared to a $6.0 million gain in the first quarter of 2019. The Company’s operating loss for the seasonally soft first quarter of 2020 improved by approximately $0.9 million as compared to the same period in 2019.
Jorge Gonzalez, the Company’s President and Chief Executive Officer, said: “An unpredictable pandemic reminds us why the business strategy we have been executing over the last few years of maintaining a fortress-like balance sheet, diversifying revenue streams and discrete phasing of new projects is so important. Conservatism, diversity and flexibility in asset types and demographics create buoyancy and opportunities. Even in times of disruption and uncertainty, not all industries are affected in the same manner nor are their recovery the same.” Mr. Gonzalez continued, “This strategy is proving true based on the current business environment. As the hospitality segment continues to be materially impacted by the current shutdown, the residential and commercial segments are proving to be more resilient. Although times are uncertain, we have increased our backlog of residential homesite contracts as well as our leased apartment units.” Mr. Gonzalez concluded, “Even though we cannot predict the residual economic impacts of COVID-19 at this time, with our strong liquidity and efficient operating and corporate cost structure, we have been building this company for the long run and to weather challenging and uncertain times.”
The following information compares the first quarter 2020 to the first quarter 2019.
Real Estate Revenue
Real estate revenue increased to $5.8 million in the first quarter of 2020 from $4.6 million in the first quarter of 2019. The timing of builder contractual closing obligations and the timing of development of completed homesites in the Company’s residential communities resulted in the sale of 19 homesites in the first quarter of 2020 totaling $2.4 million in revenue as compared to 31 homesites in the first quarter of 2019 totaling $3.1 million in revenue. The average revenue per homesite, excluding homesite residuals, was approximately $113,000 with a gross margin of 54.2% in the first quarter of 2020 as compared to an average revenue per homesite of approximately $88,000 with a gross margin of 48.4% in the first quarter of 2019.
The Company increased the number of contracted homesites with builders or retail customers in the first quarter as compared to December 31, 2019. As of March 31, 2020, the Company had 979 residential homesites under contract, which are expected to result in revenue of approximately $91.0 million over the next several years. As of December 31, 2019, the Company had 930 residential homesites under contract.
The Company also sold approximately 80 acres of commercial land in five transactions in the first quarter of 2020 totaling $2.8 million as compared to 71 acres in five transactions in the first quarter of 2019 totaling $1.1 million.
Hospitality Revenue
The revenue from The Clubs by JOE component of the Company’s hospitality segment increased in the first quarter of 2020 to $3.8 million with gross margin of 28.9%, as compared to $3.7 million in the first quarter of 2019 with gross margin of 27.0%. The increase in revenue for the first quarter of 2020 was lower than expected due to the impact of the travel restrictions and business shutdowns as a result of the COVID-19 pandemic. The company had 1,284 club members as of March 31, 2020 as compared to 1,012 club members as of March 31, 2019.
The hotel, food and beverage and other hospitality operations were impacted by the COVID-19 and related travel restrictions and shutdowns resulting in a decrease in revenue to $2.5 million for the first quarter of 2020 as compared to $3.4 million in the first quarter of 2019. Due to the COVID-19 related interruptions, some hospitality operations continue to be shut down so far in April.
As of March 31, 2020, the Company had under construction a 255-room Embassy Suites hotel in the Pier Park area of Panama City Beach, Florida, a 143-room Hilton Garden Inn hotel located near the Northwest Florida Beaches International Airport, as well as a 75-room boutique inn and new The Clubs by JOE amenities at Camp Creek. The Company intends to operate these new hotels.
Leasing Revenue
Leasing revenue from commercial, apartment and other properties increased by approximately $0.8 million for the first quarter of 2020 as compared to the same period in 2019. In addition, the Company’s apartment property received $0.7 million business interruption insurance proceeds related to Hurricane Michael which brought the gross margin to 86.0%. Without the insurance proceeds, the gross margin for the first quarter of 2020 increased to 69.8% as compared to 68.6% for the first quarter of 2019. As of March 31, 2020, the Company’s rentable commercial space consisted of approximately 869,000 square feet of which approximately 743,000 was leased, as compared to approximately 811,000 square feet as of March 31, 2019 of which approximately 755,000 was leased. In the first quarter of 2020, the Company sold the SouthWood Town Center consisting of 34,230 rentable square feet which decreased the gross square feet under lease. In addition, the 240 apartment units in Pier Park Crossings were completed of which 236 were leased, representing 98% occupancy.
As of March 31, 2020, the Company had under construction five commercial leasing projects totaling approximately 73,000 square feet of rentable space. In addition, through consolidated and unconsolidated joint ventures, the Company had under construction a 124-room TownePlace Suites hotel, 107 assisted living / memory care units, a 15,500 square foot Busy Bee branded fuel station and convenience store and apartment communities totaling 637 additional units.
Timber Revenue
Timber revenue increased to $1.9 million for the first quarter of 2020 as compared to $0.5 million for the first quarter of 2019. Revenue increased in the first quarter of 2020 as the industry continues to recover from the residual effects of Hurricane Michael. Gross margins increased to 89.5% for the first quarter of 2020 as compared to 80.0% for the first quarter of 2019.
Other Operating and Corporate Expenses
Other operating and corporate expenses increased to $6.9 million for the first quarter of 2020 compared to $6.0 million for the same period in 2019 primarily due to March payment of performance incentives and other employee related costs. The Company continues to manage operating costs to maintain an efficient structure.
Liquidity
The Company had cash, cash equivalents and investments of $158.9 million as of March 31, 2020, compared to $195.5 million as of December 31, 2019, a decrease of $36.6 million. Of the $158.9 million, $49.9 million was invested in U.S. Treasury Bills, $55.4 million was invested in U.S. Treasury Money Market Funds and $37.5 million was invested in short term commercial paper. During the first quarter of 2020, the Company incurred a total of $40.8 million for capital expenditures and used $6.8 million to repurchase approximately 0.4 million shares of its common stock. As of March 31, 2020, the Company had approximately 59.0 million shares of its common stock outstanding.
The St. Joe Company (NYSE: JOE) (the “Company”) today announced revenue for the first quarter of 2020 increased 16% to $18.6 million as compared to $16.0 million for the first quarter of 2019. Net loss and loss per share was ($1.5) million, or ($0.03) per share, compared with net income of $2.0 million, or $0.03 per share, for the same period in 2019. The first quarter earnings were impacted by COVID-19 and associated travel restrictions and shutdowns to the Company’s hospitality operations. Also, the Company reported a total investment loss of ($1.6) million for the first quarter of 2020 as compared to a $6.0 million gain in the first quarter of 2019. The Company’s operating loss for the seasonally soft first quarter of 2020 improved by approximately $0.9 million as compared to the same period in 2019.
Jorge Gonzalez, the Company’s President and Chief Executive Officer, said: “An unpredictable pandemic reminds us why the business strategy we have been executing over the last few years of maintaining a fortress-like balance sheet, diversifying revenue streams and discrete phasing of new projects is so important. Conservatism, diversity and flexibility in asset types and demographics create buoyancy and opportunities. Even in times of disruption and uncertainty, not all industries are affected in the same manner nor are their recovery the same.” Mr. Gonzalez continued, “This strategy is proving true based on the current business environment. As the hospitality segment continues to be materially impacted by the current shutdown, the residential and commercial segments are proving to be more resilient. Although times are uncertain, we have increased our backlog of residential homesite contracts as well as our leased apartment units.” Mr. Gonzalez concluded, “Even though we cannot predict the residual economic impacts of COVID-19 at this time, with our strong liquidity and efficient operating and corporate cost structure, we have been building this company for the long run and to weather challenging and uncertain times.”
The following information compares the first quarter 2020 to the first quarter 2019.
Real Estate Revenue
Real estate revenue increased to $5.8 million in the first quarter of 2020 from $4.6 million in the first quarter of 2019. The timing of builder contractual closing obligations and the timing of development of completed homesites in the Company’s residential communities resulted in the sale of 19 homesites in the first quarter of 2020 totaling $2.4 million in revenue as compared to 31 homesites in the first quarter of 2019 totaling $3.1 million in revenue. The average revenue per homesite, excluding homesite residuals, was approximately $113,000 with a gross margin of 54.2% in the first quarter of 2020 as compared to an average revenue per homesite of approximately $88,000 with a gross margin of 48.4% in the first quarter of 2019.
The Company increased the number of contracted homesites with builders or retail customers in the first quarter as compared to December 31, 2019. As of March 31, 2020, the Company had 979 residential homesites under contract, which are expected to result in revenue of approximately $91.0 million over the next several years. As of December 31, 2019, the Company had 930 residential homesites under contract.
The Company also sold approximately 80 acres of commercial land in five transactions in the first quarter of 2020 totaling $2.8 million as compared to 71 acres in five transactions in the first quarter of 2019 totaling $1.1 million.
Hospitality Revenue
The revenue from The Clubs by JOE component of the Company’s hospitality segment increased in the first quarter of 2020 to $3.8 million with gross margin of 28.9%, as compared to $3.7 million in the first quarter of 2019 with gross margin of 27.0%. The increase in revenue for the first quarter of 2020 was lower than expected due to the impact of the travel restrictions and business shutdowns as a result of the COVID-19 pandemic. The company had 1,284 club members as of March 31, 2020 as compared to 1,012 club members as of March 31, 2019.
The hotel, food and beverage and other hospitality operations were impacted by the COVID-19 and related travel restrictions and shutdowns resulting in a decrease in revenue to $2.5 million for the first quarter of 2020 as compared to $3.4 million in the first quarter of 2019. Due to the COVID-19 related interruptions, some hospitality operations continue to be shut down so far in April.
As of March 31, 2020, the Company had under construction a 255-room Embassy Suites hotel in the Pier Park area of Panama City Beach, Florida, a 143-room Hilton Garden Inn hotel located near the Northwest Florida Beaches International Airport, as well as a 75-room boutique inn and new The Clubs by JOE amenities at Camp Creek. The Company intends to operate these new hotels.
Leasing Revenue
Leasing revenue from commercial, apartment and other properties increased by approximately $0.8 million for the first quarter of 2020 as compared to the same period in 2019. In addition, the Company’s apartment property received $0.7 million business interruption insurance proceeds related to Hurricane Michael which brought the gross margin to 86.0%. Without the insurance proceeds, the gross margin for the first quarter of 2020 increased to 69.8% as compared to 68.6% for the first quarter of 2019. As of March 31, 2020, the Company’s rentable commercial space consisted of approximately 869,000 square feet of which approximately 743,000 was leased, as compared to approximately 811,000 square feet as of March 31, 2019 of which approximately 755,000 was leased. In the first quarter of 2020, the Company sold the SouthWood Town Center consisting of 34,230 rentable square feet which decreased the gross square feet under lease. In addition, the 240 apartment units in Pier Park Crossings were completed of which 236 were leased, representing 98% occupancy.
As of March 31, 2020, the Company had under construction five commercial leasing projects totaling approximately 73,000 square feet of rentable space. In addition, through consolidated and unconsolidated joint ventures, the Company had under construction a 124-room TownePlace Suites hotel, 107 assisted living / memory care units, a 15,500 square foot Busy Bee branded fuel station and convenience store and apartment communities totaling 637 additional units.
Timber Revenue
Timber revenue increased to $1.9 million for the first quarter of 2020 as compared to $0.5 million for the first quarter of 2019. Revenue increased in the first quarter of 2020 as the industry continues to recover from the residual effects of Hurricane Michael. Gross margins increased to 89.5% for the first quarter of 2020 as compared to 80.0% for the first quarter of 2019.
Other Operating and Corporate Expenses
Other operating and corporate expenses increased to $6.9 million for the first quarter of 2020 compared to $6.0 million for the same period in 2019 primarily due to March payment of performance incentives and other employee related costs. The Company continues to manage operating costs to maintain an efficient structure.
Liquidity
The Company had cash, cash equivalents and investments of $158.9 million as of March 31, 2020, compared to $195.5 million as of December 31, 2019, a decrease of $36.6 million. Of the $158.9 million, $49.9 million was invested in U.S. Treasury Bills, $55.4 million was invested in U.S. Treasury Money Market Funds and $37.5 million was invested in short term commercial paper. During the first quarter of 2020, the Company incurred a total of $40.8 million for capital expenditures and used $6.8 million to repurchase approximately 0.4 million shares of its common stock. As of March 31, 2020, the Company had approximately 59.0 million shares of its common stock outstanding.