- Quarterly revenue decreased by 6% to $68.2 million compared to
$72.2 million in 2021 due to timing of homesite sales and mix of
sales from different residential communities while the homesite
units volume increased 34% to 231 homesites. Leasing revenue
increased by 45% and hospitality revenue increased by 31%.
- Net Income decreased by 30% to $17.0 million compared to $24.2
million in 2021 due to timing of homesite sales and mix of sales
from different residential communities, particularly the sale of
homesites at the Watersound Camp Creek community in the second
quarter of 2021, which are anticipated in the second half of
2022.
- Net Cash Provided by Operating Activities decreased by 75% to
$9.2 million compared to $37.4 million in 2021 primarily due to
$20.3 million increase in investments for homesites development due
to increased homebuilder contract volume and demand.
- For the first six months of 2022, revenue increased by 17% to
$133.1 million and net income increased 11% to $30.4 million, as
compared to the first six months of 2021.
The St. Joe Company (NYSE: JOE) (the “Company”) today reports
second quarter and first half 2022 results.
Total revenue for the second quarter of 2022 decreased by 6% to
$68.2 million, as compared to $72.2 million for the second quarter
of 2021. Leasing revenue increased by 45% to $9.3 million,
hospitality revenue increased by 31% to $29.6 million, while real
estate revenue decreased by 32% to $28.0 million. The decrease in
real estate revenue is a function of timing of homesite sales,
impact of supply constraint in homesites and home development and
mix of community sales. Homesite unit sales increased 34% to 231
for the second quarter of 2022, as compared to 172 units for the
second quarter of 2021, while the average unit sales price for the
second quarter of 2022 was $83,000, as compared to $164,000 for the
second quarter of 2021. The difference in the average price is
driven by the mix of sales. The Watersound Camp Creek community
included 38 sold homesites in the second quarter of 2021 at an
average sales price of $449,000. As of June 30, 2022, the
Watersound Camp Creek community had 109 homesites under
development. For the six months ended June 30, 2022, total revenue
increased by 17% to $133.1 million, as compared to $113.5 million
for the first six months of 2021. For the first six months of 2022,
revenue growth includes a 52% increase in leasing revenue, a 29%
increase in hospitality revenue and a 4% increase in real estate
revenue, as compared to the same period in 2021.
Net income for the second quarter of 2022 decreased by 30% to
$17.0 million, or $0.29 per share, compared to net income of $24.2
million, or $0.41 per share, for the same period in 2021. Net
income for the first six months of 2022 increased by 11% to $30.4
million, or $0.52 per share, compared to net income of $27.4
million, or $0.47 per share, for the same period in 2021.
Net Cash Provided by Operating Activities for the three months
ended June 30, 2022, decreased by 75% to $9.2 million, compared to
$37.4 million for the same period in 2021. The decrease was
primarily driven by a $20.3 million increase in cash spend for
homesites development in the second quarter of 2022 as compared to
the second quarter of 2021, due to the increased homebuilder
contract volume and demand for homesites. For the six months ended
June 30, 2022, Net Cash Provided by Operating Activities decreased
by 39% to $29.0 million, compared to $47.2 million for the same
period in 2021. The decrease was driven by a $34.1 million increase
in cash spend for homesites development.
Cash Generated for Distribution or Investment (“CGFDI”), a
non-GAAP measure that is detailed in the Financial Data included
below, for the three months ended June 30, 2022, decreased by 23%
to $29.5 million, compared to $38.4 million for the same period in
2021. CGFDI for the six months ended June 30, 2022, increased by
24% to $72.9 million, compared to $58.6 million for the same period
in 2021.
In the second quarter of 2022, the Company funded $78.9 million
in capital expenditures, paid $5.9 million in cash dividends and
used $0.2 million to repurchase 4,760 shares of its common stock.
For the six months ended June 30, 2022, the Company funded $157.9
million in capital expenditures. As of June 30, 2022, the Company’s
total investment in development property was $442.7 million in
addition to $129.5 million in real estate of unconsolidated joint
ventures with development in process. These assets, when complete,
will be added to operating property or are part of the real estate
to be sold. The Company maintained cash, cash equivalents and
investments of $136.1 million as of June 30, 2022, compared to
$143.6 million as of June 30, 2021.
On July 27, 2022, the Board of Directors declared a cash
dividend of $0.10 per share on the Company’s common stock, payable
on September 9, 2022, to shareholders of record as of the close of
business on August 12, 2022.
Jorge Gonzalez, the Company’s President and Chief Executive
Officer, said, “Our leasing revenue, hospitality revenue, and
number of residential homesites sold increased in the second
quarter of 2022 compared to second quarter of 2021, but our overall
revenue and net income was down in the quarter. The reason is not a
slowdown in demand, but is directly attributed to construction
delays in the delivery of residential homesites. The Watersound
Camp Creek community is currently our highest value and highest
margin community. Our anticipated second quarter 2022 sales release
in this community was pushed into the second half of 2022, while
the second quarter of 2021 had 38 homesite sales.
“Through the first six months of 2022, we exceeded the first six
months of 2021 in revenue across each segment. As of June 30, 2022,
we had a backlog with 2,172 homesites under contract as well as 605
Latitude Margaritaville Watersound homes under contract, which
together are expected to result in a record sales value of $460.5
million. Homebuilders continue to purchase our homesites as soon as
we complete development, without any requests for delays or
extensions. Residential backlog continues to grow with a record
number of homesites and homes under contract. Demand continues to
exceed supply.
“Our hotels are performing well with high occupancies and rates.
In March 2022, we opened the Homewood Suites by Hilton, a new hotel
located immediately adjacent to the Publix Sports Park, which
attracts national amateur sports tournaments and teams. Since
opening, occupancy and rates at Homewood Suites by Hilton hotel
have exceeded our expectations. We currently have six hotels under
construction.
“Our completed multi-family and senior living portfolio has over
1,000 units, with an occupancy rate of 93%. In addition, we have
three more multi-family and senior living projects under
construction. Our commercial leasing portfolio consists of
approximately 981,000 square feet, of which approximately 909,000,
or 93%, was leased. We are building new village centers that may
one day exceed one million square feet in addition to the existing
981,000 square feet.”
Mr. Gonzalez continued, “While we continue to see demand across
our segments, we also continue to feel the impact from supply chain
disruptions that have delayed homesite and home deliveries by a few
months and have increased construction costs. Delayed deliveries
are a matter of change in timing of the sale, and are not resulting
in canceled contracts. Real estate revenue growth is never linear
and should be evaluated based on a longer trajectory. Besides
delayed completions, second quarter was impacted by our internal
decision to lease rather than begin to sell 64 townhomes that are
being built near the Watersound Origins community. As has been the
case in the past, we may delay asset sales in order to maximize
long term-values, even when those values are not captured in our
quarterly results.”
Mr. Gonzalez concluded, “We continue to see more visitors to our
resorts and hotels and more buyers moving into our residential and
multi-family communities from a broader range of states across the
country. We believe Northwest Florida’s migration and visitor
tailwinds will support growing demand in our area well into the
future. The scale of our land holdings, entitlements and resources
positions us like few other diversified real estate companies for
multi-generational value creation.”
Real Estate
For the second quarter of 2022, the homesite sales volume
increased by 34% to 231 homesites as compared to 172 homesites in
the second quarter of 2021. Due to the mix of sales from different
communities, the average sales price for the second quarter of 2022
was $83,000 per homesite as compared to $164,000 per homesite for
the second quarter of 2021. In the second quarter of 2022, the 231
homesite sales included five homesites from the Watersound Camp
Creek community and 20 homesites from the Watersound Origins and
Watersound Origins West communities. By comparison, the second
quarter of 2021 had 38 homesites from the Watersound Camp Creek
community and 51 homesites from the Watersound Origins community.
As of June 30, 2022, the Company had 109 homesites under
development in the Watersound Camp Creek community, 610 homesites
under development in the Watersound Origins community and 103
homesites under development in the Watersound Origins West
community. As of June 30, 2022, 500 homesites in these three
communities were under contract with four different
homebuilders.
For the six months ended June 30, 2022, the homesite sales
volume increased to 412 homesites as compared 375 homesites sold in
the first half of 2021. The average sales price for the first six
months of 2022 was $113,000 as compared to $115,000 for the same
period in 2021.
As of June 30, 2022, the Company had 2,172 residential homesites
under contract, which are expected to result in revenue of
approximately $167.8 million, plus residuals, over the next several
years, as compared to 1,349 residential homesites under contract
for $129.0 million, plus residuals, as of June 30, 2021.
The Latitude Margaritaville Watersound unconsolidated joint
venture, planned for 3,500 residential homes, had 143 net sale
contracts executed in the second quarter of 2022. Since the start
of sales in 2021, there have been 735 home contracts. For the
second quarter of 2022, there were 65 completed home sales bringing
the community to 130 occupied homes. The 605 homes under contract
as of June 30, 2022, are expected to result in sales of
approximately $292.7 million at completion.
Hospitality
Hospitality revenue increased by 31% to $29.6 million in the
second quarter of 2022, as compared to $22.6 million in the second
quarter of 2021. For the six months ended June 30, 2022, revenue
increased by 29% to $45.9 million, as compared to $35.7 million in
the first six months of 2021. Hospitality revenue continues to
benefit from the growth of the Watersound Club membership program
and increased visitor activity. As of June 30, 2022, the Company
had 2,488 members as compared to 1,951 members as of June 30, 2021.
As of June 30, 2022, the Company owned (individually by the Company
or through an unconsolidated joint venture) and/or managed six
hotels with 531 operational hotel rooms, as compared to 250 hotel
rooms as of June 30, 2021. In addition, there are six new hotels
under construction planned for 767 hotel rooms.
Homewood Suites by Hilton hotel at the Publix Sports Park opened
to guests in March 2022. Camp Creek Inn boutique hotel, with
expansive adjacent club amenities and The Lodge 30A hotel are
scheduled to open later this year. Embassy Suites by Hilton and the
Residence Inn by Marriott in the Pier Park area of Panama City
Beach, Hotel Indigo in Panama City’s waterfront district and the
Home2 Suites by Hilton hotel in Santa Rosa Beach will follow. When
complete, operational hotel rooms and suites are expected to
increase to 1,298 from today’s 531.
The Point South Marina Bay Point, with 127 wet slips partially
opened for business in the second quarter of 2022. Point South
Marina Port St. Joe, with 252 dry slips and 48 wet slips, plans to
commence operations this summer. 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, office, retail, multi-family,
senior living, self-storage and other properties increased by 45%
to $9.3 million in the second quarter of 2022, compared to the same
period in 2021. For the six months ended June 30, 2022, leasing
revenue increased by 52% to $18.1 million as compared to $11.9
million in the first half of 2021. As of June 30, 2022, the
Company, through consolidated and unconsolidated joint ventures,
had 1,043 completed multi-family and senior living units with an
additional 640 units under construction.
Rentable space as of June 30, 2022, consisted of approximately
981,000 square feet, of which approximately 909,000, or 93%, was
leased, compared to approximately 906,000 square feet as of June
30, 2021, of which approximately 783,000, or 86%, was leased. The
Company has an additional 116,000 square feet of rentable space
under construction. 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, 2022, increased $0.4 million to $5.5
million as compared to $5.1 million for the same period in 2021.
For the six months ended June 30, 2022, corporate and other
operating expenses decreased by $1.0 million to $11.1 million as
compared to $12.1 million for the first six months of 2021.
Additional Information and Where to Find It
Additional information with respect to the Company’s results for
the second quarter of 2022 will be available in a Form 10-Q that
will be filed with the Securities and Exchange Commission (“SEC”)
and can be found at www.joe.com and at the SEC’s website
www.sec.gov.
FINANCIAL DATA SCHEDULES
Financial data schedules in this press release include
consolidated results, summary balance sheets, corporate and other
operating expenses and the reconciliation of Cash Generated for
Distribution or Investment (CGFDI), a non-GAAP financial measure,
for the second quarter of 2022 and 2021, respectively.
FINANCIAL DATA
Consolidated Results
(Unaudited)
($ in millions except share
and per share amounts)
Quarter
Ended
June
30,
Six
Months Ended
June
30,
2022
2021
2022
2021
Revenue
Real estate revenue
$28.0
$41.0
$64.8
$62.1
Hospitality revenue
29.6
22.6
45.9
35.7
Leasing revenue
9.3
6.4
18.1
11.9
Timber revenue
1.3
2.2
4.3
3.8
Total revenue
68.2
72.2
133.1
113.5
Expenses
Cost of real estate revenue
12.8
14.1
28.1
24.6
Cost of hospitality revenue
21.4
15.4
36.3
26.9
Cost of leasing revenue
4.0
2.5
7.7
5.2
Cost of timber revenue
0.2
0.2
0.4
0.4
Corporate and other operating expenses
5.5
5.1
11.1
12.1
Depreciation, depletion and
amortization
5.5
4.2
10.5
8.0
Total expenses
49.4
41.5
94.1
77.2
Operating income
18.8
30.7
39.0
36.3
Investment income, net
2.5
1.3
4.8
2.5
Interest expense
(4.1)
(3.9)
(8.2)
(7.5)
Other income, net
4.4
4.2
4.5
5.5
Income before equity in income (loss) from
unconsolidated joint ventures and income taxes
21.6
32.3
40.1
36.8
Equity in income (loss) from
unconsolidated joint ventures
1.4
(0.6)
0.9
(1.1)
Income tax expense
(5.9)
(7.7)
(10.5)
(8.7)
Net income
17.1
24.0
30.5
27.0
Net (income) loss attributable to
non-controlling interest
(0.1)
0.2
(0.1)
0.4
Net income attributable to the Company
$17.0
$24.2
$30.4
$27.4
Basic net income per share attributable to
the Company
$0.29
$0.41
$0.52
$0.47
Basic weighted average shares
outstanding
58,882,392
58,882,549
58,882,470
58,882,549
Summary Balance Sheet (Unaudited)
($ in millions)
June 30,
2022
December
31, 2021
Assets
Investment in real estate, net
$819.6
$690.1
Investment in unconsolidated joint
ventures
54.1
52.0
Cash and cash equivalents
21.8
70.2
Investments – debt securities
113.8
89.0
Other assets
69.9
70.3
Property and equipment, net
35.4
31.1
Investments held by special purpose
entities
205.2
205.5
Total assets
$1,319.8
$1,208.2
Liabilities and Equity
Debt, net
$291.5
$223.0
Other liabilities
86.3
68.0
Deferred Revenue
39.0
36.2
Deferred tax liabilities, net
77.9
77.3
Senior Notes held by special purpose
entity
177.7
177.6
Total liabilities
672.4
582.1
Total equity
647.4
626.1
Total liabilities and equity
$1,319.8
$1,208.2
Corporate and Other Operating
Expenses (Unaudited)
($ in millions)
Quarter
Ended June 30,
Six
Months Ended June
30,
2022
2021
2022
2021
Employee costs
$2.4
$2.0
$4.7
$5.8
Property taxes and insurance
1.3
1.3
2.6
2.7
Professional fees
0.8
0.8
1.9
1.6
Marketing and owner association costs
0.4
0.3
0.6
1.0
Occupancy, repairs and maintenance
0.2
0.2
0.4
0.2
Other miscellaneous
0.4
0.5
0.9
0.8
Total corporate and other operating
expenses
$5.5
$5.1
$11.1
$12.1
Reconciliation of Non-GAAP Financial
Measures (Unaudited) ($ in millions except per share
amount)
“Cash Generated for Distribution or Investment” (CGFDI) is a
non-GAAP measure, which management believes assists investors by
providing insight into the cash generated by the Company that
management has available for distribution to shareholders or for
reinvestment into the business. This measure is calculated by
adding “Net Cash Provided by Operating Activities”, “Expenditures
for and Acquisition of Real Estate to Be Sold”, and “Capital
Distribution from Unconsolidated Joint Ventures” and subtracting
“Capital Distribution to Non-Controlling Interests”, “Principal
Payments for Debt”, “Principal Payments for Finance Leases”, and
“Maintenance Capital Expenditures”. Maintenance Capital
Expenditures are intended to show capital expenditures made to
maintain the value and/or revenue generating capacity of existing
operating assets. CGFDI should not be considered an alternative to
“Net Cash Provided by Operating Activities” determined in
accordance with GAAP as an indicator of the Company’s cash flows
and liquidity position.
Quarter
Ended
Six
Months Ended
June
30,
June
30,
2022
2021
2022
2021
Net Cash Provided by Operating
Activities
$9.2
$37.4
$29.0
$47.2
Plus: Expenditures for and Acquisition of
Real Estate to Be Sold
22.9
2.6
48.8
14.7
Plus: Capital Distribution from
Unconsolidated Joint Ventures
0.4
0.1
0.6
0.1
Less: Capital Distribution to
Non-Controlling Interests
(1.1)
(0.3)
(1.8)
(0.7)
Less: Principal Payments for Debt *
(1.0)
(0.9)
(1.5)
(1.4)
Less: Principal Payments for Finance
Leases
(0.1)
--
(0.1)
--
Less: Maintenance Capital Expenditures
(0.8)
(0.5)
(2.1)
(1.3)
CGFDI
$29.5
$38.4
$72.9
$58.6
Basic Weighted Average Shares
Outstanding
58,882,392
58,882,549
58,882,470
58,882,549
CGFDI Per Share
$0.50
$0.65
$1.24
$1.00
*Principal Payments for Debt does not
include $17.3 million refinanced by the Pier Park Crossings Phase
II joint venture which occurred in April 2022.
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; 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 2022 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: the potential
impacts of the ongoing COVID-19 pandemic; 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;
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 joint venture projects; 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; 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, including the recovery of insurance claims for losses
related to Hurricane Michael; 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.
© 2022, 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/20220727005744/en/
Marek Bakun Chief Financial Officer 1-866-417-7132
Marek.Bakun@Joe.com
St Joe (NYSE:JOE)
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