The St. Joe Company Reports Second Quarter 2019 Results | The St. Joe Company
The St. Joe Company (NYSE: JOE) (the “Company”) today announced net income for the second quarter of 2019 of $10.4 million, or $0.17 per share, compared with net income of $26.2 million, or $0.41 per share, for the second quarter of 2018. The second quarter of 2018 included a $23.1 million pre-tax benefit from impact fees related to the Company’s 2014 sale of the RiverTown community.
The following information compares the second quarter of 2019 to the second quarter of 2018.
Real Estate Revenue
Real estate revenue for the second quarter of 2018, including the $23.1 million in impact fees, totaled $32.1 million. Excluding the one-time receipt of $23.1 million in 2018 from impact fees related to the Company’s 2014 sale noted above, real estate revenue increased to $15.5 million in 2019 compared to $9.0 million in 2018. The Company transacted 151 residential lots in 2019 as compared to 37 for the same period in 2018.
As of June 30, 2019, the Company had 914 residential homesites under contract, expected to result in revenue of approximately $89.5 million over the next several years. The Company expects 203 of these residential homesites under contract to close in 2019 resulting in approximately $18.6 million in revenue. As of June 30, 2018, the Company had 644 residential homesites under contract, expected to result in revenue of approximately $65.5 million ($5.6 million of which has been realized through June 30, 2019).
Hospitality Revenue
Hospitality revenue increased in 2019 as compared to 2018 by $2.7 million due to an increase in the number of The Clubs by JOE members and membership revenue, an increase in FOOW restaurant revenue and additional revenue from the new WaterColor Store that opened in January 2019. This increase was partially offset by a reduction in golf revenue due to the sale of the Southwood Golf Course in the third quarter of 2018, the temporary closing of the WaterColor Beach Club that is currently under renovation and a decrease in marina revenue due to the damage sustained by Hurricane Michael.
Leasing Revenue
As of June 30, 2019, the Company had under construction 11 commercial projects totaling approximately 127,000 square feet of rentable space, a 124-room hotel, 107 assisted living / memory care units and two apartment communities consisting of a total of 457 units.
Leasing revenue increased by approximately $0.2 million in 2019 as compared to the same period in 2018. This increase was partially offset by a $0.4 million reduction in marina slip rental revenue caused by the closure and planned redevelopment of the Company’s marinas. As of June 30, 2019, the Company’s rentable space consisted of approximately 823,000 square feet, which was 92% leased as compared to approximately 809,000 square feet as of June 30, 2018, which was 89% leased.
Timber Revenue
Timber revenue decreased to $0.7 million in 2019 as compared to $1.9 million in 2018 due to the effects of Hurricane Michael.
Other Operating and Corporate Expenses
Other operating and corporate expenses of $5.1 million remained essentially flat in 2019 as compared to 2018. The Company continues to manage operating costs to maintain an efficient structure.
Liquidity
The Company had cash, cash equivalents and investments of $234.7 million as of June 30, 2019, compared to $240.3 million as of December 31, 2018, a decrease of $5.6 million.
Jorge Gonzalez, the Company’s President and Chief Executive Officer, said: “Demand for homes in our residential communities continues to accelerate and we further broaden and diversify our recurring revenue streams with new types of businesses and projects like apartments, select service flagged hotels, assisted living communities and flex space buildings. Our contracted residential homesites at June 30, 2019 increased substantially to 914. Broadening the residential offerings and accelerating the new communities in Bay County based on market demand is resulting in increased builder contracts and higher revenue.”
Most importantly, Mr. Gonzalez added, “In the second quarter, we also announced the execution of the definitive joint venture agreement with Minto Communities for the Latitude Margaritaville Watersound active adult community. The first phase is planned for 3,500 homes and with ground breaking projected by the end of 2019, our residential pipeline is anticipated to continue to increase. As of June 30, 2019, of the 30 projects we announced in our annual report that we intended to initiate development or construction in 2019, we have initiated approximately half of those projects. The remaining projects are in planning or permitting and on schedule to be initiated before the end of the year. This includes the 255-room full serve Embassy Suites hotel at Pier Park with expansive views of the Gulf of Mexico, which we anticipate initiating during the third quarter.”
The St. Joe Company (NYSE: JOE) (the “Company”) today announced net income for the second quarter of 2019 of $10.4 million, or $0.17 per share, compared with net income of $26.2 million, or $0.41 per share, for the second quarter of 2018. The second quarter of 2018 included a $23.1 million pre-tax benefit from impact fees related to the Company’s 2014 sale of the RiverTown community.
The following information compares the second quarter of 2019 to the second quarter of 2018.
Real Estate Revenue
Real estate revenue for the second quarter of 2018, including the $23.1 million in impact fees, totaled $32.1 million. Excluding the one-time receipt of $23.1 million in 2018 from impact fees related to the Company’s 2014 sale noted above, real estate revenue increased to $15.5 million in 2019 compared to $9.0 million in 2018. The Company transacted 151 residential lots in 2019 as compared to 37 for the same period in 2018.
As of June 30, 2019, the Company had 914 residential homesites under contract, expected to result in revenue of approximately $89.5 million over the next several years. The Company expects 203 of these residential homesites under contract to close in 2019 resulting in approximately $18.6 million in revenue. As of June 30, 2018, the Company had 644 residential homesites under contract, expected to result in revenue of approximately $65.5 million ($5.6 million of which has been realized through June 30, 2019).
Hospitality Revenue
Hospitality revenue increased in 2019 as compared to 2018 by $2.7 million due to an increase in the number of The Clubs by JOE members and membership revenue, an increase in FOOW restaurant revenue and additional revenue from the new WaterColor Store that opened in January 2019. This increase was partially offset by a reduction in golf revenue due to the sale of the Southwood Golf Course in the third quarter of 2018, the temporary closing of the WaterColor Beach Club that is currently under renovation and a decrease in marina revenue due to the damage sustained by Hurricane Michael.
Leasing Revenue
As of June 30, 2019, the Company had under construction 11 commercial projects totaling approximately 127,000 square feet of rentable space, a 124-room hotel, 107 assisted living / memory care units and two apartment communities consisting of a total of 457 units.
Leasing revenue increased by approximately $0.2 million in 2019 as compared to the same period in 2018. This increase was partially offset by a $0.4 million reduction in marina slip rental revenue caused by the closure and planned redevelopment of the Company’s marinas. As of June 30, 2019, the Company’s rentable space consisted of approximately 823,000 square feet, which was 92% leased as compared to approximately 809,000 square feet as of June 30, 2018, which was 89% leased.
Timber Revenue
Timber revenue decreased to $0.7 million in 2019 as compared to $1.9 million in 2018 due to the effects of Hurricane Michael.
Other Operating and Corporate Expenses
Other operating and corporate expenses of $5.1 million remained essentially flat in 2019 as compared to 2018. The Company continues to manage operating costs to maintain an efficient structure.
Liquidity
The Company had cash, cash equivalents and investments of $234.7 million as of June 30, 2019, compared to $240.3 million as of December 31, 2018, a decrease of $5.6 million.
Jorge Gonzalez, the Company’s President and Chief Executive Officer, said: “Demand for homes in our residential communities continues to accelerate and we further broaden and diversify our recurring revenue streams with new types of businesses and projects like apartments, select service flagged hotels, assisted living communities and flex space buildings. Our contracted residential homesites at June 30, 2019 increased substantially to 914. Broadening the residential offerings and accelerating the new communities in Bay County based on market demand is resulting in increased builder contracts and higher revenue.”
Most importantly, Mr. Gonzalez added, “In the second quarter, we also announced the execution of the definitive joint venture agreement with Minto Communities for the Latitude Margaritaville Watersound active adult community. The first phase is planned for 3,500 homes and with ground breaking projected by the end of 2019, our residential pipeline is anticipated to continue to increase. As of June 30, 2019, of the 30 projects we announced in our annual report that we intended to initiate development or construction in 2019, we have initiated approximately half of those projects. The remaining projects are in planning or permitting and on schedule to be initiated before the end of the year. This includes the 255-room full serve Embassy Suites hotel at Pier Park with expansive views of the Gulf of Mexico, which we anticipate initiating during the third quarter.”