- Hospitality revenue increased substantially above the prior
Company quarterly record achieved in the third quarter of 2023.
Hospitality gross margin increased to 39.2% in the second quarter
of 2024 as compared to 26.2% in the second quarter of 2023.
- Hospitality revenue increased by 38%, leasing revenue increased
by 19%, while real estate revenue decreased by 51% as compared to
the second quarter 2023. Overall revenue in the quarter was $111.6
million as compared to $128.1 million in 2023.
- For the first six-months of 2024, total revenue decreased by 1%
to $199.4 million from 2023 and net income attributable to the
Company decreased to $38.4 million, as compared to $45.1 million in
2023. The decrease in net income is primarily due to timing and
product mix of sales in residential communities, fewer commercial
and one-off land sales, partially offset by growth in hospitality
and leasing revenue.
- Over 22,500 homesites are in various stages of planning or
development.
- Third quarter dividend increasing 17% to $0.14 per share from
$0.12 per share.
The St. Joe Company (NYSE: JOE) (the “Company,” “We,” or “Our”)
today reports second quarter and first half 2024 results.
Jorge Gonzalez, the Company’s President and Chief Executive
Officer, said, “We continued to focus our efforts on creating
long-term shareholder value through investments in our business
with an emphasis on recurring revenue streams while distributing
excess cash by increasing the upcoming cash dividend by 17% to
$0.14 per share. This is our fourth dividend increase since we
initiated dividends in the fourth quarter of 2020, starting at
$0.07 per share and now reaching $0.14 per share, a 100% increase
in less than four years. Turning now to our operations, we have
seen dramatic positive results in the quarter from hospitality
operations due to the five new hotel openings in 2023 and growth in
the Watersound Club membership program as evidenced by our 38%
period-over-period growth in hospitality revenue during second
quarter of 2024. In fact, we again achieved record hospitality
revenue for a single quarter. Hospitality gross margin also
increased substantially as the Company is beginning to achieve
higher revenues and operating efficiency. Leasing revenue continues
to increase as additional commercial projects are completed,
bringing the Company portfolio to over 1.1 million rentable square
feet.”
Mr. Gonzalez continued, “Despite the continued growth in
hospitality and leasing revenues, overall revenue decreased as a
result of an extraordinarily high number of homesites that were
completed and sold in the second quarter of 2023, fueled by the
completion and sale of a new phase of 133 homesites in the
Watersound Origins community in June 2023. The Company sold 186
homesites in the second quarter of 2024, as compared to 300
homesites for the same period in 2023. As we often say, the
‘seeding and harvesting’ cycle of residential homesite development
and sales is not linear and therefore not ideal for
quarter-to-quarter comparisons. Total revenue in the second quarter
of 2024 exceeded all quarters in 2023 except for the second
quarter. Overall, there were 349 homesites and homes sold in the
second quarter of 2024. This includes 186 homesites in ten
different residential communities and 163 homes in the Latitude
Margaritaville Watersound unconsolidated joint venture. All
builders performed on their contractual obligations and no builder
requested a delay in closings. The Company’s residential homesite
pipeline has over 22,500 homesites in twenty different communities
at various stages of planning or development.”
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 of housing demand in our region is
the net migration that is continuing 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.”
Consolidated Second Quarter and First Half 2024
Results
Total consolidated revenue for the second quarter of 2024
decreased by 13% to $111.6 million as compared to $128.1 million
for the second quarter of 2023. Hospitality revenue increased by
38% to $62.3 million and leasing revenue increased by 19% to $14.8
million. Real estate revenue decreased by 51% to $34.5 million due
to a mix of sales from different communities, timing of homebuilder
contractual closing obligations and reduced commercial
transactions.
For the six months ended June 30, 2024, total consolidated
revenue decreased by 1% to $199.4 million, as compared to $201.1
million for the first six months of 2023. Hospitality revenue
increased by 46% to $101.6 million and leasing revenue increased by
20% to $29.1 million. Real estate revenue decreased by 36% to $68.7
million due to mix of sales from different residential communities
and fewer commercial and one-off land sales, as compared to the
same period in 2023.
Over the past several years, the Company has entered into joint
ventures which are unconsolidated and accounted for using the
equity method. For the three months ended June 30, 2024, these
unconsolidated joint ventures had $94.1 million of revenue, as
compared to $88.8 million for the same period in 2023. The
Company’s economic interests in its unconsolidated joint ventures
for the three months ended June 30, 2024, resulted in $5.4 million
of equity in income from unconsolidated joint ventures, as compared
to $6.0 million for the three months ended June 30, 2023. For the
first six months of 2024, these unconsolidated joint ventures had
$189.9 million of revenue, as compared to $170.6 million for the
first six months of 2023. The Company’s economic interests in its
unconsolidated joint ventures resulted in $12.8 million of equity
in income from unconsolidated joint ventures, for the first six
months of 2024, as compared to $9.7 million for the first six
months of 2023. Although these business ventures are not included
as revenue in the Company’s financial statements, they are part of
the core business strategy, which generates substantial financial
returns for the Company.
Net income attributable to the Company for the second quarter of
2024 decreased by 29% to $24.5 million, or $0.42 per share, as
compared to net income of $34.7 million, or $0.60 per share, for
the same period in 2023. Net income for the first six months of
2024 decreased by 15% to $38.4 million, or $0.66 per share, as
compared to net income of $45.1 million, or $0.77 per share, for
the same period in 2023.
Earnings before interest, taxes, depreciation and amortization
(“EBITDA”), a non-GAAP financial measure, for the three months
ended June 30, 2024, decreased by 18% to $49.2 million, as compared
to $59.7 million for the same period in 2023. EBITDA for the six
months ended June 30, 2024, was $84.2 million as compared to $84.1
million for the first six months of 2023. Depreciation is a
non-cash, GAAP expense which is amortized over an asset’s
prescribed 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 24, 2024, the Board of Directors declared a cash
dividend of $0.14 per share on the Company’s common stock, payable
on September 6, 2024, to shareholders of record as of the close of
business on August 9, 2024. The third quarter dividend represents a
17% increase from the second quarter 2024 dividend of $0.12 per
share.
Real Estate
Total real estate revenue decreased by 51% to $34.5 million in
the second quarter of 2024, as compared to $70.6 million in the
second quarter of 2023. The quarter-to-quarter homesite sales and
margin results depend more on the timing of completion of
development and product mix. The second quarter of 2023 included
activity which, as discussed in prior quarters, was delayed due to
development delays as a result of the supply chain disruptions
experienced in 2022 and early 2023.
The Company sold 186 homesites at an average base price of
approximately $140,000 and gross margin of 52.3%, in the second
quarter of 2024, as compared to 300 homesites at an average base
price of approximately $153,000 and gross margin of 53.8% in the
second quarter of 2023. The differences in the average sales price,
number of homesite closings and gross margin period-over-period
were due to the mix of sales in different communities.
As of June 30, 2024, the Company had 1,303 residential homesites
under contract, which are expected to result in revenue of
approximately $114.0 million, plus residuals, over the next several
years, as compared to 1,825 residential homesites under contract
for $158.5 million, plus residuals, as of June 30, 2023. The change
in homesites under contract is due to increased homesite closing
transactions during 2023 and the first half of 2024 and the amount
of remaining homesites in current phases of residential
communities. The Company’s residential homesite pipeline has over
22,500 homesites in various stages of development, engineering,
permitting or concept planning.
The Latitude Margaritaville Watersound unconsolidated joint
venture, planned for 3,500 residential homes, had 135 net sale
contracts executed in the second quarter of 2024. Since the start
of sales in 2021, there have been 1,878 home contracts. For the
second quarter of 2024, there were 163 completed home sales
bringing the community to 1,344 occupied homes. The 534 homes under
contract as of June 30, 2024, with an average sales price of
approximately $567,000, are expected to result in sales value of
approximately $302.8 million at completion, as compared to 665
homes under contract as of June 30, 2023, with an average sales
price of approximately $501,000.
Hospitality
Hospitality revenue increased by 38% to a Company quarterly
record of $62.3 million in the second quarter of 2024, as compared
to $45.1 million in the second quarter of 2023. Hospitality revenue
continues to benefit from the growth of the Watersound Club
membership program and the opening of five hotels throughout 2023.
As of June 30, 2024, the Company had 3,571 club members, as
compared to 2,853 club members as of June 30, 2023, an increase of
718 net new members. As of June 30, 2024, the Company owned
(individually by the Company or through consolidated and
unconsolidated joint ventures) twelve hotels with 1,298 operational
hotel rooms, as compared to eleven hotels with 1,177 rooms as of
June 30, 2023.
Leasing
Leasing revenue from commercial, office, retail, multi-family,
senior living, self-storage and other properties increased by 19%
to $14.8 million in the second quarter of 2024, as compared to the
same period in 2023. As of June 30, 2024, the Company (individually
by the Company or through consolidated and unconsolidated joint
ventures) had 1,383 rentable multi-family and senior living
units.
Leasable space as of June 30, 2024, consisted of approximately
1,100,000 square feet, of which approximately 1,058,000, or 96%,
was leased, as compared to approximately 1,041,000 square feet as
of June 30, 2023, of which approximately 1,016,000, or 98%, was
leased. As of June 30, 2024, the Company had an additional 82,000
square feet of leasable space under construction. The Company is
focused on commercial leasing space at the Watersound Town Center,
Watersound West Bay Center and the FSU/TMH Medical Campus. These
three centers, and others in the planning stage, have the potential
to more than double the Company’s total current leasable commercial
space and rental multi-family units. The Company, wholly or through
joint ventures, also owns significant hospitality businesses that
may 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, 2024, increased by $0.4 million to $5.9
million, as compared to $5.5 million for the same period in 2023.
For the first six months of 2024, corporate and other operating
expenses increased by $1.6 million to $12.9 million, as compared to
$11.3 million for the first six months of 2023.
Investments, Liquidity and Debt
In the second quarter of 2024, the Company funded $32.4 million
in capital expenditures. In addition, the Company paid $7.0 million
in cash dividends and repaid a net of $4.7 million of debt. For the
first six months of 2024, the Company funded $63.9 million of
capital expenditures, paid $14.0 million in cash dividends and
repaid a net of $6.9 million of debt. As of June 30, 2024, the
Company had $86.7 million in cash, cash equivalents and other
liquid investments, as compared to $88.6 million as of June 30,
2023. As of June 30, 2024, the Company had $294.9 million invested
in development property, which, when complete, will be added to
operating property or sold. As of June 30, 2024, the weighted
average effective interest rate of outstanding debt was 5.3% with
an average remaining life of 16.9 years. 67% of the Company’s
outstanding debt had a fixed or swapped interest rate. The
remaining 33% of debt has interest rates that vary with SOFR.
Company debt as of June 30, 2024, is approximately 29% of the
Company’s total assets.
Additional Information and Where to Find It
Additional information with respect to the Company’s results for
the second quarter and first half of 2024 will be available in a
Form 10-Q that will be filed with the Securities and Exchange
Commission (“SEC”) and can be found at www.joe.com and at the SEC’s
website www.sec.gov. We recommend studying the Company’s latest
Form 10-K and Form 10-Q before making an investment decision.
FINANCIAL DATA SCHEDULES
Financial data schedules in this press release include
consolidated results, summary balance sheets, corporate and other
operating expenses and the reconciliation of earnings before
interest, taxes, depreciation and amortization (EBITDA), a non-GAAP
financial measure, for the second quarter and first half of 2024
and 2023, respectively.
FINANCIAL DATA
Consolidated Results
(Unaudited)
($ in millions except share
and per share amounts)
Quarter
Ended
June
30,
Six
Months Ended
June
30,
2024
2023
2024
2023
Revenue
Real estate revenue
$34.5
$70.6
$68.7
$107.3
Hospitality revenue
62.3
45.1
101.6
69.6
Leasing revenue
14.8
12.4
29.1
24.2
Total revenue
111.6
128.1
199.4
201.1
Expenses
Cost of real estate revenue
16.6
31.5
32.7
51.8
Cost of hospitality revenue
37.9
33.3
68.2
56.2
Cost of leasing revenue
7.3
6.5
14.5
11.9
Corporate and other operating expenses
5.9
5.5
12.9
11.3
Depreciation, depletion and
amortization
11.3
9.5
22.5
16.8
Total expenses
79.0
86.3
150.8
148.0
Operating income
32.6
41.8
48.6
53.1
Investment income, net
3.4
3.2
6.8
6.1
Interest expense
(8.5)
(7.2)
(17.1)
(13.4)
Equity in income from unconsolidated joint
ventures
5.4
6.0
12.8
9.7
Other (expense) income, net
(0.1)
1.5
(0.5)
2.7
Income before income taxes
32.8
45.3
50.6
58.2
Income tax expense
(8.3)
(11.5)
(13.0)
(14.9)
Net income
24.5
33.8
37.6
43.3
Net (income) loss attributable to
non-controlling interest
--
0.9
0.8
1.8
Net income attributable to the Company
$24.5
$34.7
$38.4
$45.1
Basic net income per share attributable to
the Company
$0.42
$0.60
$0.66
$0.77
Basic weighted average shares
outstanding
58,331,818
58,314,117
58,326,153
58,311,619
Summary Balance Sheet
(Unaudited)
($ in millions)
June 30,
2024
December
31, 2023
Assets
Investment in real estate, net
$1,035.8
$1,018.6
Investment in unconsolidated joint
ventures
71.4
66.4
Cash and cash equivalents
86.7
86.1
Other assets
90.3
82.2
Property and equipment, net
62.4
66.0
Investments held by special purpose
entities
203.8
204.2
Total assets
$1,550.4
$1,523.5
Liabilities and Equity
Debt, net
$447.4
$453.6
Accounts payable and other liabilities
65.3
58.6
Deferred revenue
64.1
62.8
Deferred tax liabilities, net
72.9
71.8
Senior Notes held by special purpose
entity
178.3
178.2
Total liabilities
828.0
825.0
Total equity
722.4
698.5
Total liabilities and equity
$1,550.4
$1,523.5
Corporate and Other Operating
Expenses (Unaudited)
($ in millions)
Quarter
Ended
June
30,
Six
Months Ended
June
30,
2024
2023
2024
2023
Employee costs
$3.1
$2.7
$6.8
$5.4
Property taxes and insurance
1.2
1.3
2.7
2.7
Professional fees
0.6
0.7
1.7
1.7
Marketing and owner association costs
0.4
0.2
0.5
0.4
Occupancy, repairs and maintenance
0.1
0.1
0.3
0.3
Other miscellaneous
0.5
0.5
0.9
0.8
Total corporate and other operating
expenses
$5.9
$5.5
$12.9
$11.3
Reconciliation of Non-GAAP Financial
Measures (Unaudited) ($ 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,
2024
2023
2024
2023
Net income attributable to the Company
$24.5
$34.7
$38.4
$45.1
Plus: Interest expense
8.5
7.2
17.1
13.4
Less: Investment income, net
(3.4)
(3.2)
(6.8)
(6.1)
Plus: Income tax expense
8.3
11.5
13.0
14.9
Plus: Depreciation, depletion and
amortization
11.3
9.5
22.5
16.8
EBITDA
$49.2
$59.7
$84.2
$84.1
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; 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 2024 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; inflation; financial institution disruptions;
supply chain disruptions; geopolitical conflicts (such as the
conflict between Russia and Ukraine, the conflict in the Gaza Strip
and the general unrest in the Middle East) 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 interest of prospective
guests in our hotels, including the new hotels we have opened since
the beginning of 2023; reductions in travel and other risks
inherent to the hospitality industry; 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; 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 negatively impacting 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.
© 2024, 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/20240724555842/en/
St. Joe Investor Relations Contact: Marek Bakun Chief Financial
Officer 1-866-417-7132 Marek.Bakun@Joe.Com
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