The St. Joe Company Reports Third Quarter 2016 Results

The St. Joe Company (NYSE:JOE) (the "Company") today announced Net Income for the third quarter of 2016 of $2.7 million, or $0.04 per share, compared with Net Income of $2.8 million, or $0.03 per share, for the third quarter of 2015. For the nine months ended September 30, 2016, the Company reported Net Income of $13.2 million, or $0.18 per share compared to Net Income of $0.8 million, or $0.01 per share for the same period last year.

The Company's operating and corporate expenses declined by $4.7 million, or 47%, in the third quarter of 2016 as compared to the same quarter last year. For the nine months ended September 30, 2016, the operating and corporate expenses declined by $7.0 million, or 28%, as compared to the nine months ended September 30, 2015. The decline was primarily due to a decrease in employee related costs and professional fees.

Third Quarter highlights include:
  • While Net Income for the third quarter of 2016 was similar to the third quarter of 2015, operating income for the third quarter of 2016 increased by $4.0 million primarily due to reduced operating and corporate expenses as compared to the third quarter of 2015. In comparison, Net Income for the third quarter of 2015 included a one-time gain of $5.3 million on the sale of investments.
  • Total revenue for the quarter was $27.2 million as compared to $27.8 million in the third quarter of 2015 due to a decrease in real estate revenue and timber revenue partially offset by an increase in resorts and leisure revenue and leasing revenue. The Company's third quarter 2016 revenue was generated from $4.2 million of real estate revenue, $19.0 million from resorts and leisure operations, $2.7 million from leasing operations and $1.3 million from timber revenue.
  • Real estate revenue decreased to $4.2 million in the third quarter of 2016 as compared to $4.9 million in the third quarter of 2015. Real estate revenue in the third quarter of 2016 was comprised of $3.1 million in residential real estate revenue, $0.6 million in commercial real estate revenue and $0.5 million in other revenue. The third quarter of 2015 included $4.9 million in residential real estate revenue. Real estate revenue fluctuates from quarter to quarter partially based on timing of builder contractual closing obligations.
  • Resorts and leisure revenue increased approximately $0.5 million in the third quarter of 2016 to $19.0 million as compared to the third quarter of 2015. The increase during the third quarter of 2016 as compared to the same period in 2015 was primarily related to increased average room rates at both the WaterColor Inn and in the vacation rental program as well as an increase in membership revenue from the St. Joe Club & Resorts private membership club.
  • Leasing revenue increased $0.2 million during the third quarter of 2016, as compared to the third quarter of 2015. As of September 30, 2016, the Company had approximately 517,000 square feet of retail, industrial and commercial space leased.
  • As of September 30, 2016, the Company had cash, cash equivalents and investments of $402.0 million, as compared to $399.8 million as of June 30, 2016, an increase of $2.2 million.

Jorge Gonzalez, the Company's President and Chief Executive Officer, said "One of our areas of focus is to grow recurring revenue while maintaining a low fixed expense structure." Mr. Gonzalez added, "Accordingly, we are planning to grow our leasable spaces and we are focused on attracting new businesses into the area and into our commerce parks that can diversify the economy."
FINANCIAL DATA
 
Consolidated Results
($ in millions except share and per share amounts)
   
   

Quarter Ended

September 30,
 

Nine Months Ended

September 30,
   

2016
 

2015
 

2016
 

2015
Revenue                
Real estate revenue   $4.2   $4.9   $18.0   $24.3
Resorts and leisure revenue   19.0   18.5   47.6   45.7
Leasing revenue   2.7   2.5   7.4   6.8
Timber revenue  

1.3
 

1.9
 

4.0
 

6.0
Total revenue  

27.2
 

27.8
 

77.0
 

82.8
Expenses              
Cost of real estate revenue   2.0 2.5 6.7 12.3
Cost of resorts and leisure revenue   15.4 14.7 40.4 38.2
Cost of leasing revenue   0.7 0.7 2.2 2.0
Cost of timber revenue   0.2 0.2 0.6 0.6
Other operating and corporate expenses   5.2 9.9 17.7 24.7
Depreciation, depletion and amortization  

2.1
 

2.2
 

6.5
 

7.3
Total expenses  

25.6
 

30.2
 

74.1
 

85.1
Operating income (loss)  

1.6
 

(2.4)
 

2.9
 

(2.3)
Other income  

2.0
 

6.4
 

15.1
 

5.1

Income from operations before equity in income from

unconsolidated affiliates and income taxes
 

3.6
 

4.0
 

18.0
 

2.8
Income tax expense  

(0.9)
 

(1.2)
 

(5.2)
 

(2.0)
Net income  

2.7
 

2.8
 

12.8
 

0.8
Net loss attributable to non-controlling interest  

--
 

--
 

0.4
 

--
Net income attributable to the Company  

$2.7
 

$2.8
 

$13.2
 

$0.8
Net income per share attributable to the Company  

$0.04
 

$0.03
 

$0.18
 

$0.01
Weighted average shares outstanding   74,342,826   92,026,894   74,496,058   92,088,253
 

Revenues

($ in millions)
 
    Quarter Ended

September 30,
  Nine Months Ended

September 30,
   

2016
 

2015
 

2016
 

2015
Revenue:                
Real estate revenue                
Residential   $3.1   $4.9   $15.9   $14.3
Commercial   0.6   --   0.6   4.7
Other real estate revenue  

0.5
 

--
 

1.5
 

5.3
Total real estate revenue   4.2   4.9   18.0   24.3
Resorts and leisure revenue   19.0   18.5   47.6   45.7
Leasing revenue   2.7   2.5   7.4   6.8
Timber revenue  

1.3
 

1.9
 

4.0
 

6.0
Total revenue  

$27.2
 

$27.8
 

$77.0
 

$82.8
 

Summary Balance Sheet
($ in millions)
 
   

September 30, 2016
 

December 31, 2015
Assets        
Investment in real estate, net   $313.0   $313.6
Cash and cash equivalents   165.3   212.8
Investments   236.7   191.2
Restricted investments   5.6   7.1
Notes receivable, net   2.0   2.6
Property and equipment, net   9.2   10.1
Claim settlement receivable   12.7   --
Other assets   33.3   36.5
Investments held by special purpose entities  

208.6
 

208.8
Total assets  

$986.4
 

$982.7
         
Liabilities and Equity        
Debt   $54.2   $54.5
Other liabilities   43.4   41.9
Deferred tax liabilities   39.4   36.8
Senior Notes held by special purpose entity  

176.2
 

176.1
Total liabilities  

313.2
 

309.3
Total equity  

673.2
 

673.4
Total liabilities and equity  

$986.4
 

$982.7
 
Debt Schedule
($ in millions)
   
   

September 30, 2016
 

December 31, 2015
Pier Park North joint venture   $47.5   $47.5
Community Development District debt  

6.7
 

7.0
Total debt  

$54.2
 

$54.5
 
Other Operating and Corporate Expenses
($ in millions)
 
   

Quarter Ended

September 30,
 

Nine Months Ended

September 30,
   

2016
 

2015
 

2016
 

2015
Employee costs   $1.8   $4.5   $5.3   $10.0
401(k) contribution / pension costs   --   --   1.4   1.1
Non-cash stock compensation costs   --   --   0.1   0.2
Property taxes and insurance   1.4   1.4   4.2   4.4
Professional fees   1.2   2.8   3.8   5.6
Marketing and owner association costs   0.3   0.3   1.0   1.0
Occupancy, repairs and maintenance   0.2   0.2   0.5   0.7
Other  

0.3
 

0.7
 

1.4
 

1.7
Total other operating and corporate expense  

$5.2
 

$9.9
 

17.7
 

$24.7

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