Kurt
Admin
Jacksonville, Florida - (May 5, 2009) - The St. Joe Company (NYSE: JOE) today announced a Net Loss for the first quarter 2009 of $(11.7) million, or $(0.13) per share, which includes non-cash charges of $1.5 million, or $0.01 per share after tax. This compares to Net Income of $32.1 million, or $0.40 per share, for the first quarter of 2008, which included non-cash charges of $2.8 million, or $0.02 per share after tax. All per-share references in this release are presented on a diluted basis.
"Although Northwest Florida's real estate markets remain challenging, our residential communities have seen a relatively modest improvement in traffic and sales activity since the end of last year," said Britt Greene, JOE's President and CEO. "However, it is too early to predict a bottom or a trend. The actions we have taken, such as adjusting pricing for our inventory of homes, has helped us to respond to a market that seems interested but remains timid. We are also seeing measured activity in our commercial markets throughout the region. Our primary focus is on planning for the opportunities presented by the upcoming opening of the new Panama City - Bay County International Airport. The airport, centrally located within our key land assets, is scheduled to open in 2010."
"As we have said earlier, although we expect rural land sales to be our largest contributor to revenues in 2009, we plan to sell significantly fewer acres in 2009 than in 2008," said Greene. During the first quarter 2009, JOE generated approximately $4.2 million of revenue from rural land sales, compared to $91.1 million in the first quarter last year. While the average price per acre increased during the quarter, JOE is carefully monitoring the potential impact that the current economic environment may have on pricing or overall demand for rural land.
Liquidity and Balance Sheet
At March 31, 2009, JOE had cash and pledged treasury securities of $138.2 million, compared to debt of $49.2 million, $28.5 million of which is defeased debt. JOE's $100 million line of credit remains undrawn at March 31, 2009.
"In light of the current economic challenges, we strengthened our liquidity position by virtually eliminating our debt, enhancing our cash position and securing a new credit facility in early 2008," said William S. McCalmont, JOE's Executive Vice President and CFO. "We continue to take a very prudent approach as we manage our assets and continue to reduce capital expenditures, as well as operating and overhead expenses. We have the flexibility to execute our strategy on our valuable land holdings proximate to the new international airport."
During the first quarter this year, JOE incurred cash overhead costs of $17.3 million, compared to $24.4 million for the first quarter last year, a 29 percent reduction. In addition, capital expenditures for the first quarter this year were $5.5 million, compared to $18.2 million in the first quarter last year, a reduction of 70 percent.
West Bay
JOE has accelerated preconstruction development activity on one thousand acres in West Bay adjacent to the new international airport scheduled to open in May 2010. The land is being planned for office, retail and industrial users.
"With the scheduled airport opening now one year away, we are working to position several initial parcels near the airport to be 'revenue-ready,'" said Greene. "Our land at West Bay is a world-class asset, and our marketing outreach is to global users."
The local airport authority recently selected as the airport's master developer Jones Lang LaSalle (NYSE: JLL), the global real estate services firm specializing in commercial property management, leasing, and investment management. The airport authority is currently negotiating an agreement with the Chicago-based firm.
On May 1, 2009, the United States Court of Appeals for the Second Circuit in New York City denied a pending petition for review of the Federal Aviation Administration's Record of Decision approving the relocation of the airport to its new site in West Bay. In the ruling, the court upheld the FAA's process and approval of the new airport.
The airport authority has reported that construction of the new international airport is past the half-way mark. The framing for the terminal is coming out of the ground and the control tower foundation has been completed. The concrete has been poured on the first phase of the airport's primary runway, and finishing work has started on the runway surface. Aerial photography of the new airport under construction can be seen on the airport authority's web site, www.newpcairport.com.
Land Holdings and Entitlements
On March 31, 2009, JOE owned approximately 585,000 acres, concentrated primarily in Northwest Florida. Approximately 405,000 acres, or 70 percent of JOE's total land holdings, are within 15 miles of the coast of the Gulf of Mexico.
On March 31, 2009, JOE's land-use entitlements in hand or in process totaled approximately 45,000 residential units and approximately 13.8 million square feet of commercial space, as well as an additional 589 acres with land-use entitlements for commercial uses.
"Although Northwest Florida's real estate markets remain challenging, our residential communities have seen a relatively modest improvement in traffic and sales activity since the end of last year," said Britt Greene, JOE's President and CEO. "However, it is too early to predict a bottom or a trend. The actions we have taken, such as adjusting pricing for our inventory of homes, has helped us to respond to a market that seems interested but remains timid. We are also seeing measured activity in our commercial markets throughout the region. Our primary focus is on planning for the opportunities presented by the upcoming opening of the new Panama City - Bay County International Airport. The airport, centrally located within our key land assets, is scheduled to open in 2010."
"As we have said earlier, although we expect rural land sales to be our largest contributor to revenues in 2009, we plan to sell significantly fewer acres in 2009 than in 2008," said Greene. During the first quarter 2009, JOE generated approximately $4.2 million of revenue from rural land sales, compared to $91.1 million in the first quarter last year. While the average price per acre increased during the quarter, JOE is carefully monitoring the potential impact that the current economic environment may have on pricing or overall demand for rural land.
Liquidity and Balance Sheet
At March 31, 2009, JOE had cash and pledged treasury securities of $138.2 million, compared to debt of $49.2 million, $28.5 million of which is defeased debt. JOE's $100 million line of credit remains undrawn at March 31, 2009.
"In light of the current economic challenges, we strengthened our liquidity position by virtually eliminating our debt, enhancing our cash position and securing a new credit facility in early 2008," said William S. McCalmont, JOE's Executive Vice President and CFO. "We continue to take a very prudent approach as we manage our assets and continue to reduce capital expenditures, as well as operating and overhead expenses. We have the flexibility to execute our strategy on our valuable land holdings proximate to the new international airport."
During the first quarter this year, JOE incurred cash overhead costs of $17.3 million, compared to $24.4 million for the first quarter last year, a 29 percent reduction. In addition, capital expenditures for the first quarter this year were $5.5 million, compared to $18.2 million in the first quarter last year, a reduction of 70 percent.
West Bay
JOE has accelerated preconstruction development activity on one thousand acres in West Bay adjacent to the new international airport scheduled to open in May 2010. The land is being planned for office, retail and industrial users.
"With the scheduled airport opening now one year away, we are working to position several initial parcels near the airport to be 'revenue-ready,'" said Greene. "Our land at West Bay is a world-class asset, and our marketing outreach is to global users."
The local airport authority recently selected as the airport's master developer Jones Lang LaSalle (NYSE: JLL), the global real estate services firm specializing in commercial property management, leasing, and investment management. The airport authority is currently negotiating an agreement with the Chicago-based firm.
On May 1, 2009, the United States Court of Appeals for the Second Circuit in New York City denied a pending petition for review of the Federal Aviation Administration's Record of Decision approving the relocation of the airport to its new site in West Bay. In the ruling, the court upheld the FAA's process and approval of the new airport.
The airport authority has reported that construction of the new international airport is past the half-way mark. The framing for the terminal is coming out of the ground and the control tower foundation has been completed. The concrete has been poured on the first phase of the airport's primary runway, and finishing work has started on the runway surface. Aerial photography of the new airport under construction can be seen on the airport authority's web site, www.newpcairport.com.
Land Holdings and Entitlements
On March 31, 2009, JOE owned approximately 585,000 acres, concentrated primarily in Northwest Florida. Approximately 405,000 acres, or 70 percent of JOE's total land holdings, are within 15 miles of the coast of the Gulf of Mexico.
On March 31, 2009, JOE's land-use entitlements in hand or in process totaled approximately 45,000 residential units and approximately 13.8 million square feet of commercial space, as well as an additional 589 acres with land-use entitlements for commercial uses.
Unbelievable. Watch out for Watersound North and Watersound West Beach--Joe will begin unloading lots at some lowball values in the next year or so in an attempt to generate some revenue. Just as they have dropped the price on the homes in Phase IV of Watercolor recently. I wouldn't be surprised to see lots for $75k before long in Watersound West Beach and under $40k in Watersound North.