Highlights for the second quarter of 2023 compared to the second
quarter of 2022:
- Quarterly net income attributable to the Company increased by
104% to $34.7 million from $17.0 million.
- Quarterly revenue increased by 88% to $128.1 million from $68.2
million.
- Real estate revenue increased by 148% to $69.3 million from
$28.0 million with average base revenue, excluding homesite
residuals, per homesite sold of $153,000 as compared to
$83,000.
- Hospitality revenue increased by 52% to a quarterly record of
$45.1 million from $29.6 million.
- Leasing revenue increased by 33% to $12.4 million from $9.3
million. As of June 30, 2023, the 1,041,000 of net rentable square
feet were 98% leased.
- Homesite closings volume increased 30% to 300 homesites from
231 homesites.
- Latitude Margaritaville Watersound unconsolidated joint venture
home sale transaction completions increased by 152% to 164 homes as
compared to 65 homes.
The St. Joe Company (NYSE: JOE) (the “Company”) today reports
second quarter and first half 2023 results.
Jorge Gonzalez, the Company’s President and Chief Executive
Officer, said, “We showed solid organic growth in the quarter
across each of our segments without any unique one-time events. We
grew revenue in the second quarter of 2023 by 88% and net income
attributable to the Company by 104%. Our real estate revenue grew
by 148% to $69.3 million. Our hospitality revenue grew by 52% to
$45.1 million even with four of the new hotels not being open at
the start of the quarter. Our leasing revenue grew by 33% to $12.4
million.”
Mr. Gonzalez continued, “We sold 300 homesites in the second
quarter of 2023 as compared to 231 homesites in the second quarter
of 2022. The 300 homesite sales were across 10 different
communities, sold to 10 separate homebuilders and various retail
customers, with the average base revenue per homesite increasing to
$153,000 when compared to $83,000 for the second quarter of
2022.
“In addition to our homesite sales, the Latitude Margaritaville
Watersound unconsolidated joint venture had 150 new contracts and
164 completed home sales in the quarter. The 665 homes under
contract at quarter end are expected to result in a sales value of
$333.2 million to the joint venture. Since the start of sales in
the community in 2021, there have been 1,341 home sale contracts
and 676 completed homes at Latitude, all of which occurred without
a completed amenity. The amenity, located on the Intracoastal
Waterway, opened in June and we anticipate will help to grow
sales.”
Mr. Gonzalez concluded, “This quarter demonstrates what we have
been saying all along, which is that housing demand in our region
is solid and our quarter-to-quarter homesite sales and margin
results depend more on the timing of completion of development and
product mix. The biggest driver to housing demand in our region is
the net migration that is occurring from a wider range of
geographies where individuals and families are looking for a high
quality of life, safety, security, natural beauty, and great
schools. Walton County is ranked #3 out of 67 school districts in
Florida. In addition to net migration, more vacationers are
discovering our area as demonstrated by the 52% growth in our
hospitality revenue. At the start of 2020, we had a total of only
71 hotel rooms for visitors as compared to the end of the second
quarter of 2023, where we now have 1,177 hotel rooms in a wide
range of locations at varying price points.
“We will continue to focus on long term value creation by
executing on what we know to be true. We own nearly 170,000 acres
in Florida. We have ‘as of right’ entitlements to develop over
170,000 residential units and tens of millions of square feet of
commercial space, and we are only beginning, with the majority of
the current revenue derived from less than 2% of our land holdings.
We have proven that we can grow recurring profits by efficiently
developing, leasing, and operating real estate assets rather than
just selling land.”
Consolidated Second Quarter and First Half 2023
Results
Total consolidated revenue for the second quarter of 2023
increased by 88% to $128.1 million, as compared to $68.2 million
for the second quarter of 2022. Real estate revenue increased by
148% to $69.3 million, hospitality revenue increased by 52% to
$45.1 million and leasing revenue increased by 33% to $12.4
million. Homesite unit sales increased 30% to 300 for the second
quarter of 2023, as compared to 231 units for the second quarter of
2022, while the average base unit sales price for the second
quarter of 2023 was $153,000, excluding homesite residuals, as
compared to $83,000 for the second quarter of 2022. The difference
in the average price is driven by the mix of sales from different
residential communities.
For the six months ended June 30, 2023, total consolidated
revenue increased by 51% to $201.1 million, as compared to $133.1
million for the first six months of 2022. For the first six months
of 2023, consolidated revenue growth included a 61% increase in
real estate revenue, a 52% increase in hospitality revenue and a
34% increase in leasing revenue, as compared to the same period in
2022.
Over the past few years, the Company entered into eight joint
ventures which are unconsolidated and accounted for using the
equity method. For the three months ended June 30, 2023, these
unconsolidated joint ventures had $88.9 million of revenue, as
compared to $33.9 million for the same period in 2022. For the
first six months of 2023, these unconsolidated joint ventures had
$170.7 million of revenue, as compared to $47.3 million for the
first six months of 2022. This activity is in addition to the
Company’s reported consolidated revenue. The Company’s economic
interests in its unconsolidated joint ventures resulted in $9.7
million in equity in income from unconsolidated joint ventures, for
the first six months of 2023, as compared to $0.9 million for the
first six months of 2022. Although these business ventures are not
included as revenue in the Company’s financial statements, they are
part of the core business strategy which is generating substantial
financial returns for the Company.
Net income for the second quarter of 2023 increased by 104% to
$34.7 million, or $0.60 per share, as compared to net income of
$17.0 million, or $0.29 per share, for the same period in 2022. Net
income for the first six months of 2023 increased by 48% to $45.1
million, or $0.77 per share, as compared to net income of $30.4
million, or $0.52 per share, for the same period in 2022.
Earnings before interest, taxes, depreciation and amortization
(“EBITDA”), a non-GAAP financial measure, for the three months
ended June 30, 2023, increased by 99% to $59.7 million, as compared
to $30.0 million for the same period in 2022. EBITDA for the six
months ended June 30, 2023, increased by 53% to $84.1 million, as
compared to $54.8 million for the same period in 2022. Depreciation
is a non-cash, GAAP expense which is amortized over an asset’s
useful life, while maintenance and repair expenses are period costs
and expensed as incurred. See Financial Data below for additional
information, including a reconciliation of EBITDA to net income
attributable to the Company.
On July 26, 2023, the Board of Directors declared a cash
dividend of $0.12 per share on the Company’s common stock, a 20%
increase from the June 2023 dividend payment, payable on September
8, 2023, to shareholders of record as of the close of business on
August 11, 2023.
Real Estate
For the three months ended June 30, 2023, real estate revenue
increased by 148% to $69.3 million, as compared to $28.0 million
for the three months ended June 30, 2022. The homesite sales volume
increased by 30% to 300 homesites as compared to 231 homesites for
the three months ended June 30, 2022. Due to the mix of sales from
different communities, the average base sales price for the second
quarter of 2023 was $153,000 per homesite as compared to $83,000
per homesite for the second quarter of 2022.
For the six months ended June 30, 2023, real estate revenue
increased by 61% to $104.3 million as compared to $64.8 million for
the first six months of 2022. The homesite sales volume increased
by 52% to 627 homesites as compared to 412 homesites sold in the
first half of 2022. The average base sales price for the first six
months of 2023 was $105,000 as compared to $113,000 for the same
period in 2022.
As of June 30, 2023, the Company had 1,825 residential homesites
under contract, which are expected to result in base revenue of
approximately $87,000 per homesite, plus residuals over the next
several years, as compared to 2,172 residential homesites under
contract at approximately $77,000 per homesite, plus residuals as
of June 30, 2022. The change in homesites under contract is due to
increased homesite transactions in the first six months of 2023 and
amount of remaining homesites in current phases of residential
communities.
The Latitude Margaritaville Watersound unconsolidated joint
venture, planned for 3,500 residential homes, had 150 net sales
contracts executed in the second quarter of 2023. Since the start
of sales in 2021, there have been 1,341 home contracts. For the
second quarter of 2023, there were 164 completed home sales,
bringing the community to 676 occupied homes. The 665 homes under
contract as of June 30, 2023, are expected to result in a sales
value of approximately $333.2 million at completion. The 665 homes
under contract had an average sales price of approximately $501,000
as of June 30, 2023, as compared to the 605 homes under contract
with an average sales price of approximately $484,000 as of June
30, 2022.
Hospitality
Hospitality revenue increased by 52% to a quarterly record of
$45.1 million in the second quarter of 2023, as compared to $29.6
million in the second quarter of 2022. Hospitality revenue
continues to benefit from the growth of the Watersound Club
membership program and increased operational hotel rooms. As of
June 30, 2023, the Company had 2,853 club members as compared to
2,488 club members as of June 30, 2022. As of June 30, 2023, the
Company owned (individually by the Company or through consolidated
and unconsolidated joint ventures) eleven hotels with 1,177
operational hotel rooms, as compared to 476 hotel rooms as of June
30, 2022.
Five hotels, totaling 646 rooms, opened for business in 2023.
The Lodge 30A hotel opened to guests in February 2023. Embassy
Suites by Hilton Panama City Beach Resort located in the Pier Park
area of Panama City Beach opened for business in April 2023. Home2
Suites by Hilton Santa Rosa Beach hotel and Hotel Indigo Panama
City Marina opened for business in June 2023. The Camp Creek Inn
received the first guests in July 2023. Residence Inn by Marriott,
in the Pier Park area of Panama City Beach, is also under
construction, which when complete, increases operational hotel
rooms to 1,298 rooms.
Point South Marina Bay Point, with 127 wet slips, opened for
business in the third quarter of 2022. Point South Marina Port St.
Joe, with 252 dry slips and 48 wet slips, opened for business in
the fourth quarter of 2022. The Company is planning to build and/or
operate additional marinas with potential for a total of 750 wet
and dry slips.
Leasing
Leasing revenue from commercial, retail, multi-family, senior
living, self-storage, marinas and other properties increased by 33%
to $12.4 million in the second quarter of 2023, compared to the
same period in 2022. As of June 30, 2023, the Company, through
consolidated and unconsolidated joint ventures, had 1,024 completed
multi-family and senior living units with an additional 359 units
under construction.
Rentable space as of June 30, 2023, consisted of approximately
1,041,000 square feet, of which approximately 1,016,000, or 98%,
was leased, as compared to approximately 981,000 square feet as of
June 30, 2022, of which approximately 909,000, or 93%, was leased.
The Company has an additional 124,000 square feet of rentable space
under construction. The Company is focused on commercial lease
space at the Watersound Town Center, Watersound West Bay Center and
the FSU/TMH Medical Campus. These three centers have the potential
for over 1.2 million square feet of leasable space. The Company,
wholly or through joint ventures, owns or operates commercial and
hospitality businesses on real estate that could otherwise be
leased to others.
Corporate and Other Operating Expenses
The Company’s corporate and other operating expenses for the
three months ended June 30, 2023, and 2022, were comparable at $5.5
million for both periods and increased $0.2 million for the first
six months of 2023 to $11.3 million as compared to the first six
months of 2022 of $11.1 million. Corporate and operating expenses
were approximately 6% of revenue for the first six months of 2023,
as compared to 8% for the first six months of 2022.
Investments, Liquidity and Debt
In the second quarter of 2023, the Company funded $60.9 million
in capital expenditures. In addition, the Company paid $5.8 million
in cash dividends. As of June 30, 2023, the Company had $88.6
million in cash, cash equivalents and other liquid investments as
compared to $78.3 million as of December 31, 2022, an increase of
$10.3 million. As of June 30, 2023, the Company had $300.7 million
invested in development property, which, when complete, will be
added to operating property or sold.
As of June 30, 2023, the weighted average effective interest
rate of outstanding debt was 5.2% with the average remaining life
of 17.7 years. 68% of the Company’s outstanding debt had a fixed or
swapped interest rate. The remaining 32% of debt has interest rates
that vary with LIBOR or SOFR. Effective July 1, 2023, the remainder
of the Company’s debt agreements utilizing LIBOR will automatically
transition to SOFR. Company debt as of June 30, 2023, is
approximately 29% of the Company’s total assets.
Additional Information and Where to Find It
Additional information with respect to the Company’s results for
the second quarter 2023 will be available in a Form 10-Q that will
be filed with the Securities and Exchange Commission (“SEC”) and
can be found at www.joe.com and at the SEC’s website www.sec.gov.
We recommend studying the Company’s latest Form 10-Q and Form 10-K
before making an investment decision.
FINANCIAL DATA SCHEDULES
Financial data schedules in this press release include
consolidated results, summary balance sheets, corporate and other
operating expenses and the reconciliation of earnings before
interest, taxes, depreciation and amortization (EBITDA), a non-GAAP
financial measure, for the second quarter of 2023 and 2022,
respectively.
FINANCIAL DATA
Consolidated Results
(Unaudited)
($ in millions except share
and per share amounts)
Quarter
Ended June 30,
Six
Months Ended June
30,
2023
2022
2023
2022
Revenue
Real estate revenue
$69.3
$28.0
$104.3
$64.8
Hospitality revenue
45.1
29.6
69.6
45.9
Leasing revenue
12.4
9.3
24.2
18.1
Timber revenue
1.3
1.3
3.0
4.3
Total revenue
128.1
68.2
201.1
133.1
Expenses
Cost of real estate revenue
31.3
12.8
51.4
28.1
Cost of hospitality revenue
33.3
21.4
56.2
36.3
Cost of leasing revenue
6.5
4.0
11.9
7.7
Cost of timber revenue
0.2
0.2
0.4
0.4
Corporate and other operating expenses
5.5
5.5
11.3
11.1
Depreciation, depletion and
amortization
9.5
5.5
16.8
10.5
Total expenses
86.3
49.4
148.0
94.1
Operating income
41.8
18.8
53.1
39.0
Investment income, net
3.2
2.5
6.1
4.8
Interest expense
(7.2
)
(4.1
)
(13.4
)
(8.2
)
Equity in income from unconsolidated joint
ventures
6.0
1.4
9.7
0.9
Other income, net
1.5
4.4
2.7
4.5
Income before income taxes
45.3
23.0
58.2
41.0
Income tax expense
(11.5
)
(5.9
)
(14.9
)
(10.5
)
Net income
33.8
17.1
43.3
30.5
Net loss (income) attributable to
non-controlling interest
0.9
(0.1
)
1.8
(0.1
)
Net income attributable to the Company
$34.7
$17.0
$45.1
$30.4
Basic net income per share attributable to
the Company
$0.60
$0.29
$0.77
$0.52
Basic weighted average shares
outstanding
58,314,117
58,882,392
58,311,619
58,882,470
Summary Balance Sheet
(Unaudited)
($ in millions)
June 30,
2023
December
31, 2022
Assets
Investment in real estate, net
$1,006.1
$996.3
Investment in unconsolidated joint
ventures
60.4
50.0
Cash and cash equivalents
60.7
37.7
Investments – debt securities
27.9
40.6
Other assets
93.5
61.7
Property and equipment, net
69.0
39.6
Investments held by special purpose
entities
204.5
204.9
Total assets
$1,522.1
$1,430.8
Liabilities and Equity
Debt, net
$446.6
$385.9
Other liabilities
78.3
94.3
Deferred revenue
47.4
38.9
Deferred tax liabilities, net
90.1
82.7
Senior Notes held by special purpose
entity
178.0
177.9
Total liabilities
840.4
779.7
Total equity
681.7
651.1
Total liabilities and equity
$1,522.1
$1,430.8
Corporate and Other Operating
Expenses (Unaudited)
($ in millions)
Quarter
Ended June 30,
Six
Months Ended June
30,
2023
2022
2023
2022
Employee costs
$2.7
$2.4
$5.4
$4.7
Property taxes and insurance
1.3
1.3
2.7
2.6
Professional fees
0.7
0.8
1.7
1.9
Marketing and owner association costs
0.2
0.4
0.4
0.6
Occupancy, repairs and maintenance
0.1
0.2
0.3
0.4
Other miscellaneous
0.5
0.4
0.8
0.9
Total corporate and other operating
expenses
$5.5
$5.5
$11.3
$11.1
Reconciliation of Non-GAAP Financial
Measures (Unaudited) ($ in millions)
Earnings before interest, taxes, depreciation and amortization
(“EBITDA”) is a non-GAAP financial measure, which management
believes assists investors by providing insight into operating
performance of the Company across periods on a consistent basis
and, when viewed in combination with the Company results prepared
in accordance with GAAP, provides a more complete understanding of
factors and trends affecting the Company. However, EBITDA has
limitations as an analytical tool and should not be considered in
isolation or as a substitute for analysis of results reported under
GAAP. EBITDA is calculated by adjusting “Interest expense”,
“Investment income, net”, “Income tax expense”, “Depreciation,
depletion and amortization” to “Net income attributable to the
Company”.
Quarter
Ended
Six
Months Ended
June
30,
June
30,
2023
2022
2023
2022
Net income attributable to the Company
$34.7
$17.0
$45.1
$30.4
Plus: Interest expense
7.2
4.1
13.4
8.2
Less: Investment income, net
(3.2)
(2.5)
(6.1)
(4.8)
Plus: Income tax expense
11.5
5.9
14.9
10.5
Plus: Depreciation, depletion and
amortization
9.5
5.5
16.8
10.5
EBITDA
$59.7
$30.0
$84.1
$54.8
Important Notice Regarding
Forward-Looking Statements
Certain statements contained in this press release, as well as
other information provided from time to time by the Company or its
employees, may contain forward-looking statements that involve
risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. You can
identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. These statements
may include words such as “guidance,” “anticipate,” “estimate,”
“expect,” “forecast,” “project,” “plan,” “intend,” “believe,”
“confident,” “may,” “should,” “can have,” “likely,” “future” and
other words and terms of similar meaning in connection with any
discussion of the timing or nature of future operating or financial
performance or other events. Examples of forward-looking statements
in this press release include statements regarding our growth
prospects; expansion of operational assets such as increases in
hotel rooms in 2023; plans to maintain an efficient cost structure;
our capital allocation initiatives, including the payment of our
quarterly dividend; plans regarding our joint venture developments;
and the timing of current developments and new projects in 2023 and
beyond. These statements involve risks and uncertainties, and
actual results may differ materially from any future results
expressed or implied by the forward-looking statements.
The Company wishes to caution readers that, although we believe
any forward-looking statements are based on reasonable assumptions,
certain important factors may have affected and could in the future
affect the Company’s actual financial results and could cause the
Company’s actual financial results for subsequent periods to differ
materially from those expressed in any forward-looking statement
made by or on behalf of the Company, including: our ability to
successfully implement our strategic objectives; new or increased
competition across our business units; any decline in general
economic conditions, particularly in our primary markets; interest
rate fluctuations; supply chain disruptions; inflation; financial
institution disruptions; geopolitical conflicts and political
uncertainty and the corresponding impact on the global economy; our
ability to successfully execute or integrate new business endeavors
and acquisitions; our ability to yield anticipated returns from our
developments and projects; our ability to effectively manage our
real estate assets, as well as the ability for us or our joint
venture partners to effectively manage the day-to-day activities of
our projects; our ability to complete construction and development
projects within expected timeframes; the illiquidity of all real
estate assets; financial risks, including risks relating to
currency fluctuations, credit risks, and fluctuations in the market
value of our investment portfolio; any potential negative impact of
our longer-term property development strategy, including losses and
negative cash flows for an extended period of time if we continue
with the self-development of granted entitlements; our dependence
on homebuilders; mix of sales from different communities and the
corresponding impact on sales period over period; reductions in
travel and other risks inherent to the hospitality industry; the
financial condition of our commercial tenants; regulatory and
insurance risks associated with our senior living facilities;
public health emergencies; any reduction in the supply of mortgage
loans or tightening of credit markets; our dependence on strong
migration and population expansion in our regions of development,
particularly Northwest Florida; our ability to fully recover from
natural disasters and severe weather conditions; the actual or
perceived threat of climate change; the seasonality of our
business; our ability to obtain adequate insurance for our
properties or rising insurance costs; our dependence on certain
third party providers; the inability of minority shareholders to
influence corporate matters, due to concentrated ownership of
largest shareholder; the impact of unfavorable legal proceedings or
government investigations; the impact of complex and changing laws
and regulations in the areas we operate; changes in tax rates, the
adoption of new U.S. tax legislation, and exposure to additional
tax liabilities, including with respect to Qualified Opportunity
Zone program; new litigation; our ability to attract and retain
qualified employees, particularly in our hospitality business; our
ability to protect our information technology infrastructure and
defend against cyber-attacks; increased media, political, and
regulatory scrutiny could negatively impact our reputation; our
ability to maintain adequate internal controls; risks associated
with our financing arrangements, including our compliance with
certain restrictions and limitations; our ability to pay our
quarterly dividend; and the potential volatility of our common
stock. More information on these risks and other potential factors
that could affect the Company’s business and financial results is
included in the Company’s filings with the SEC, including in the
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” sections of the
Company’s most recently filed periodic reports on Form 10-K and
subsequent filings. The discussion of these risks is specifically
incorporated by reference into this press release.
Any forward-looking statement made by us in this press release
speaks only as of the date on which it is made, and we do not
undertake to update these statements other than as required by
law.
About The St. Joe
Company
The St. Joe Company is a real estate development, asset
management and operating company with real estate assets and
operations in Northwest Florida. The Company intends to use
existing assets for residential, hospitality and commercial
ventures. St. Joe has significant residential and commercial
land-use entitlements. The Company actively seeks higher and better
uses for its real estate assets through a range of development
activities. More information about the Company can be found on its
website at www.joe.com. On a regular basis, the Company releases a
video showing progress on projects in development or under
construction. See https://www.joe.com/video-gallery for more
information.
© 2023, The St. Joe Company. “St. Joe®”, “JOE®”, the “Taking
Flight” Design®, “St. Joe (and Taking Flight Design)®”, and other
amenity names used herein are the registered service marks of The
St. Joe Company or its affiliates or others.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230726943362/en/
St. Joe Investor Relations Contact: Marek Bakun Chief Financial
Officer 1-866-417-7132 marek.bakun@joe.Com
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