The St. Joe Company Reports First Quarter 2005 Net Income of $0.20 Per Share, an Increase of 17.6 Percent Over First Quarter 2004
biz.yahoo.com
Wednesday April 20, 7:08 am ET
JOE Raises Guidance for Full-Year 2005; JOE 2005 Earnings Per Share Now Expected to be $1.60 to $1.75
JACKSONVILLE, Fla.--(BUSINESS WIRE)--April 20, 2005-- The St. Joe Company today announced that its Net Income for the first quarter of 2005 was $15.2 million, or $0.20 per share, compared with $13.0 million, or $0.17 per share, for the first quarter of 2004. All per share references in this release are presented on a diluted basis.
"During the first quarter of 2005, our real estate activity was robust across all our segments," said Peter S. Rummell, chairman and CEO of JOE. "Solid performance continues, both in terms of price appreciation and sales velocity. Momentum continues to build in Florida's favor - particularly in Northwest Florida. We are pleased with the strong sales across our residential projects. Our strategy of carefully managing releases at our resort towns is capturing the increasing values at these communities."
"At the same time, we continue to see evidence that the major demographic shift we have talked about for several years is now in fact underway," said Rummell. "Last week the U.S. Census Bureau released new data identifying the nation's one hundred fastest growing counties. Florida leads the nation in the number of high-growth counties. This new data helps confirm what we've been saying for some time: Florida is the place to be."
"It appears this demographic trend is beginning to manifest itself in facts on the ground," said Rummell. "It's most obvious in pricing power. JOE's Gulf coast land values are moving closer to those of more established southern coastal resort areas. Over time, those types of destinations will be our best comps - and our prime competitors."
"Based on our strong first quarter, the progress we have made moving new projects to market and the significant price appreciation we are seeing in Northwest Florida, we are pleased to raise our guidance for the full year," said Rummell. "We now expect full-year results for 2005 to be between $1.60 and $1.75 per share."
JOE's Pipeline Continues to Grow
"The management of the entitlements process remains a clear focus, a core competency and a strategic advantage for us," said Kevin M. Twomey, JOE's president and COO. "We continue to improve our understanding of our land in Northwest Florida and to find higher and better uses for it. That is not only good for JOE, it is important for the future economic health of the region."
"JOE's pipeline of residential projects extends well into the future, with approximately 29,000 units with land-use entitlements or in various stages of the land-use entitlements process, net of units sold or under contract through March 31, 2005, in a variety of markets across Florida," said Twomey.
"The increase in the number of land parcels in residential areas with entitlements, particularly in Bay County, now allows JOE the opportunity to selectively choose whether to develop projects or sell entitled land to third parties on a finished-lot or undeveloped basis," said Twomey. "JOE is evaluating a number of these parcels to determine which approach, development or sell, would generate the maximum financial benefit to our shareholders."
"JOE continues to create and develop the next generation of projects that provide more options and drive the region's value creation cycle," said Rummell. "During the first quarter, we continued predevelopment and design work at key communities with land-use entitlements. An example is WindMark Beach, where the entitlements process reached another important milestone late in the first quarter. With the expiration of challenge periods, state environmental permits for the project became final. Pending the receipt of remaining permits, we expect to start infrastructure construction by this summer."
"Another example is Perico Island, where we now have land-use entitlements in hand for 686 upscale condominium units on 352 acres with spectacular views of The Gulf of Mexico to the Skyway Bridge across Tampa Bay," said Rummell. "We believe Perico Island will be an excellent performer, with sales activity expected to start in late 2006. Final permitting is required before construction can begin."
Market Conditions
"We continue to monitor economic conditions very closely, both nationally and in Florida," said Rummell. "Although interest rates have been trending upward, thus far we have seen no evidence that they are hurting our sales velocity or price appreciation. We are also monitoring the impact of rising gasoline prices on traffic from our key feeder markets."
"For us, the more significant market factors are the power of Baby Boomer demographics and the strength of Florida's economy," said Rummell. "Florida's economic fundamentals are solid. Statewide, employers created 172,000 jobs last year, making Florida one of the fastest growing job markets in the country. And at the end of 2004, wages and salaries in Florida were up 6.1 percent from a year earlier."
"Florida, where we have significant demographic and geographic advantages, has one of the nation's strongest economies," said Rummell. "Demographic and market research consistently shows strong demand for residential property in coastal Northwest Florida. This region is attracting the interest of a growing share of the Baby Boomer market. Demand among households qualified by age, wealth and likelihood to purchase a second or pre-retirement home is predicted to be strong and growing over the next 15 years. This has obvious and important strategic implications for JOE."
JOE Invests in Southwest Georgia Land
During the first quarter of 2005, JOE expanded its Investment Property Portfolio to include the acquisition of land in southwest Georgia for the continuing redeployment of tax deferred land proceeds. Previously, investments were made primarily in commercial office buildings. Through the middle of April 2005, JOE acquired approximately 47,000 acres at an aggregate purchase price of $57.5 million, or approximately $1,225 per acre.
The majority of this land is located in Stewart County, approximately 100 miles north of the Florida border in the southwest part of Georgia between JOE's core land holdings in Northwest Florida and key JOE feeder markets including Atlanta.
OUTLOOK
Full-Year Guidance for 2005 Raised
"Building on a very solid first quarter and with a strong pipeline of business in place, we look ahead to the remainder of this year with increased confidence," said Anthony M. Corriggio, JOE's CFO.
"In February of 2005, we said that we expected earnings per share for the full year 2005, excluding gains from conservation land sales, to be in the range of $1.35 to $1.50 per diluted share," said Corriggio.
"We are pleased to now raise our guidance," said Corriggio. "JOE expects to have another strong year in 2005, with earnings per share to be in the range of $1.60 to $1.75 per share. These results are not expected to include any material conservation land sales gains."
"We believe JOE's major segments will produce good results in 2005 as we bring a broad array of real estate products to market," said Corriggio.
Towns & Resorts
"We expect JOE's Towns & Resorts segment to drive a large part of the increase in earnings for 2005," said Corriggio. "We expect continued strong performance from WaterSound Beach and WaterColor. Several existing projects, notably Artisan Park, Victoria Park, Palmetto Trace, Rivercrest and Paseos, are expected to see earnings increases. Two new projects, SummerCamp and WaterSound West Beach, are also expected to generate income in 2005, subject to the receipt of necessary environmental permits."
"Notably, our current expectations for 2005 do not include sales at four major projects we expect to bring to market in 2006: WindMark Beach, WaterSound, RiverTown and Perico Island," said Corriggio.
Commercial Real Estate
"We also anticipate strong performance from our commercial real estate segment this year," said Corriggio. "We expect 2005 results for this segment to significantly exceed 2004 results, primarily due to higher levels of commercial land sales and increased commercial development activity. We expect to generate significant earnings from the sale of commercial land, multi-family parcels and retail parcels in Panama City Beach. We expect commercial results to include pretax income of approximately $7.0 million from building sales and approximately $2.0 million from a land sale in Houston."
St. Joe Land Company
"We also expect St. Joe Land Company to deliver higher pretax income in 2005, albeit with a substantially different mix of earnings sources," said Corriggio. "RiverCamps is expected to deliver meaningful income in 2005, with more sales and increased unit pricing throughout the remainder of the year. We also expect the balance of the 2005 Land Company sales mix to be comprised of smaller parcel retail sales and no large tract sales. In 2004 large parcel sales over $2.0 million contributed $31.0 million to pretax income."
DIVIDENDS AND STOCK REPURCHASE PROGRAM
A quarterly cash dividend of $0.14 per share of common stock was paid on March 31, 2005 to shareholders of record at the close of business on March 15, 2005.
During the first quarter of 2005, the company expended an aggregate of $27.3 million for dividends and the acquisition of its shares. JOE acquired 232,403 of its shares at a cost of $16.6 million, an average price of $71.59 per share, during the first quarter. Of these amounts, 171,200 shares were acquired through open market purchases for $12.3 million (an average of $71.98 per share) and 61,203 shares of stock, having a value of $4.3 million, were surrendered by company executives as payment for the strike price and taxes due on exercised stock options or taxes due on the vesting of restricted stock. |
