Misc The St. Joe Company Reports Third Quarter 2020 Results

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  1. Kurt Lischka

    Kurt Lischka Admin Staff Member

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    The St. Joe Company (NYSE: JOE) (the “Company”) today announced total revenue increased by approximately 28% to $42.0 million for the third quarter of 2020 as compared to $32.8 million for the third quarter of 2019. The increase was broad-based across all segments with a 37% increase in real estate revenue, a 22% increase in leasing revenue and a 21% increase in hospitality revenue. Operating income increased approximately 49% for the three months ended September 30, 2020 as compared to the three months ended September 30, 2019. Net income increased approximately 37% to $7.8 million, or $0.13 per share, compared with net income of $5.7 million, or $0.10 per share, for the same period in 2019. For the nine months ended September 30, 2020, the Company’s net income increased by approximately 40% to $25.4 million or $0.43 per share compared to net income of $18.1 million or $0.30 per share for the same nine-month period in 2019.

    The Board of Directors authorized a new quarterly cash dividend program, and on October 28, 2020, declared a cash dividend of $0.07 per share on its common stock, payable on December 9, 2020 to shareholders of record at the close of business on November 13, 2020.

    Jorge Gonzalez, the Company’s President and Chief Executive Officer, said, “We are continuing to see positive momentum in all operating segments. We sold 162 homesites in the third quarter, compared to 94 homesites in the third quarter of 2019, an increase of 72%. The Clubs by JOE membership grew by 97 in the third quarter and 174 for the first nine months of 2020, bringing the total to 1,448 members as of September 30, 2020. The 21% growth in our hospitality revenue is especially noteworthy considering the COVID-19 impacts across the world. In addition to our amazing people and assets, we believe that the drive-to aspect of our hospitality market is one of the reasons for the strong growth. This momentum is also occurring in our commercial segment. In the third quarter, we executed nine new commercial leases bringing the year to date total of new commercial leases to 23.”


    Mr. Gonzalez continued, “Our operating revenue and income for the third quarter and for the first nine months of 2020 exceeded our revenue and operating income for the same periods in 2019, while our operating and corporate expenses have remained steady. We currently have 1,401 residential homesites under contract with 13 different builders and plans for additional residential communities in Bay County. The opening of the Latitude Margaritaville Watersound community is on target for April 2021 with site development on the initial 248 homesites underway with an additional 381 homesites fully permitted and anticipated to commence development within the next 30 days for a total of 629 homesites. We have an additional 637 new apartment units under construction plus the recently announced 240-unit Star Avenue apartment community planned to begin construction in November 2020. Together with the 240 completed Pier Park Crossings units, it will bring the total apartment unit count to 1,117. Our hospitality segment is building upon the growth we are experiencing by adding an additional 689 new hotel rooms which are currently under construction, and other operational assets such as The Clubs by JOE amenity complex at Watersound Camp Creek.”

    Mr. Gonzalez concluded, “With the continued improvement in business, the Board of Directors initiated a new quarterly dividend program, and today declared a $0.07 per share dividend. I expect the dividend will grow with earnings and complement our existing share buyback program and growth investments.”

    Real Estate Revenue

    Real estate revenue increased by approximately 37% to $18.5 million in the third quarter of 2020 as compared to $13.5 million in the third quarter of 2019. The Company sold 162 homesites at an average price of approximately $82,000 with gross margins of 49% in the third quarter of 2020 as compared to 94 homesites at an average price of $101,000 with gross margins of 44% in the third quarter of 2019. The difference in the average sales price was due to mix of sales from different communities. In addition to the homesite sales, the Company had eight commercial, rural and unimproved residential land sales totaling $2.6 million as compared to six such commercial and rural land sales totaling $2.2 million in the third quarter of 2019.

    The Company executed new contracts for 694 homesites in the third quarter of 2020 bringing the total homesites under contract to 1,401 as of September 30, 2020. These 1,401 residential homesites under contract are expected to result in revenue of approximately $85,000 per homesite for a total of $119.3 million over the next several years.

    Hospitality Revenue

    Hospitality revenue increased by approximately 21% to $17.0 million in the third quarter of 2020 as compared to $14.0 million in the third quarter of 2019. Hospitality revenue benefited from an extended vacation season in the current period consistent with delayed school openings, increases in homeschooling and a rise in remote work arrangements related to COVID-19. The table below details hospitality revenue by month for the third quarter of 2020 and 2019.

    As of September 30, 2020, the Company had under construction a 143-room Hilton Garden Inn hotel located near the Northwest Florida Beaches International Airport, a 75-room boutique inn and new The Clubs by JOE amenities at Watersound Camp Creek and a 131-room Homewood Suites hotel near the new Panama City Beach Sports Complex. In addition, the Company, with separate joint venture partners, has under construction a 255-room Embassy Suites hotel in the Pier Park area of Panama City Beach and an 85-room boutique hotel in Seagrove Beach. The Company intends to operate these new hotels. In addition, the Bay Point Marina and Port St. Joe Marina are in reconstruction and additional new marinas are in the planning process.

    Leasing Revenue

    Leasing revenue from commercial, retail, apartment and other properties increased by approximately 22% for the third quarter of 2020 compared to the same period in 2019. This increase was due to increasing apartment leasing revenue as well as higher lease rates. COVID-19 had minimal impact on the commercial segment. In the third quarter of 2020, the Company did not provide any rent abatements, but deferred approximately $0.1 million of lease payments. The Company has also started collecting the $0.3 million of deferred lease payments from the second quarter of 2020.

    In the third quarter of 2020, the Company executed nine new commercial leases bringing the year to date total of new commercial leases to 23. As of September 30, 2020, the Company’s rentable space consisted of approximately 904,000 square feet of which approximately 758,000 was leased, compared to approximately 822,000 square feet as of September 30, 2019 of which approximately 757,000 was leased. In the first quarter of 2020, the Company sold the SouthWood Town Center, which consisted of 34,230 rentable square feet. The decrease in gross square feet under lease resulting from the sale of the SouthWood Town Center was offset by newly completed rentable space. As of September 30, 2020, the 240 completed apartment units in Pier Park Crossings were 98% leased.


    The Company, through consolidated and unconsolidated joint ventures, has under construction three apartment communities totaling 637 additional units and a 107 unit assisted living / memory care project. In addition, the Company has a commercial leasing project and a self-storage facility under construction totaling approximately 91,000 square feet of rentable space. The Company has executed leases on approximately 55,000 square feet of additional commercial spaces which are expected to begin construction in 2021.

    Timber Revenue

    Timber revenue increased by approximately 23% to $1.6 million with gross margins of approximately 88% for the third quarter of 2020 as compared to $1.3 million with gross margins of approximately 85% for the third quarter of 2019.

    Other Operating and Corporate Expenses

    Other operating and corporate expenses of $5.1 million remained essentially flat in the third quarter of 2020 compared to the third quarter of 2019. The Company continues to manage operating costs to maintain an efficient structure.

    Liquidity

    The Company maintained cash, cash equivalents and investments of $155.1 million as of September 30, 2020 compared to $158.5 million at the beginning of the quarter. Of the $155.1 million, $50.0 million was invested in U.S. Treasury Bills and $84.0 million was invested in U.S. Treasury Money Market Funds. During the third quarter of 2020, the Company incurred a total of $36.5 million in capital expenditures.

    Financial data schedules in this press release include consolidated results, summary balance sheets, debt and other operating and corporate expenses for the third quarter of 2020 and 2019, respectively.
     

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