The St. Joe Company Reports Second Quarter 2004 Net Income of $22.7 Million, or $0.30 Per Share
Wednesday July 21, 7:02 am ET
biz.yahoo.com
JACKSONVILLE, Fla.--(BUSINESS WIRE)--July 21, 2004--The St. Joe Company (NYSE:JOE):
JOE Raises 2004 Full-Year Guidance
RiverTown and WindMark Beach Complete Key Approvals
Sales Velocity and Pricing in Town and Resort Communities Continue to Strengthen
JOE and Government Agencies Agree on Environmental Permitting for 39,000 Acres in Northwest Florida
The St. Joe Company (NYSE:JOE - News) today announced that its second quarter 2004 Net Income was $22.7 million, or $0.30 per share, compared with $9.9 million, or $0.13 per share, for the second quarter of 2003.
Net Income in the second quarter of 2004 included after-tax conservation land gains of $1.5 million, or $0.02 per share, compared to $3.2 million, or $0.04 per share, in the second quarter of 2003. Results for the second quarter of 2003 also included a non-cash charge of $8.8 million net of tax, or $0.11 per share, to reduce the carrying value of Advantis Real Estate Services, the company's commercial real estate services unit. All per share references in this release are presented on a fully diluted basis.
Net Income for the first half of 2004 was $35.7 million, or $0.46 per share, compared with $24.3 million, or $0.31 per share, for the first half of 2003. Net income year-to-date for 2004 included after-tax conservation land gains of $1.5 million, or $0.02 per share, compared to $11.4 million, or $0.15 per share, along with the Advantis charge in the 2003 period.
"JOE continued to build momentum during the second quarter," said Peter S. Rummell, chairman and CEO of JOE. "We're well on our way to a very good 2004. Demand for our real estate products - resort and primary residential, commercial and rural land - remains strong. The recent increase in interest rates from historic lows has had no apparent impact on sales to date. We are pleased with our performance, our position and our financial flexibility. We're looking forward to the rest of the year with growing confidence and are pleased to raise our full-year guidance for 2004.
"We continue to be disciplined about the release of new product in Northwest Florida," said Rummell. "The market has begun to recognize the values being created in this region, and one of our greatest challenges going forward will be to time product releases to maximize these values."
"JOE has numerous advantages," said Rummell. "Most important, our low-basis, high-quality land enables us to remain patient as we create value in Northwest Florida. Our goal is to ensure that as much of our land as possible benefits from the appreciation that we are building with the region's increased visibility, infrastructure development and place-making."
"Early in the third quarter, JOE reached an agreement with the U.S. Army Corps of Engineers and the Florida Department of Environmental Protection which will expedite future development within approximately 39,000 acres in Walton and Bay Counties," said Rummell. "This agreement represents a significant advance in large-scale land planning and a unique asset for JOE."
"During the second quarter, we again made significant entitlement advances," said Rummell. "We have built a solid pipeline of entitled land that will allow us to continue to create new inventory in high-quality communities for many years to come. In the second quarter, JOE received key land use approvals for WindMark Beach in Northwest Florida and RiverTown near Jacksonville. Although permitting steps remain, we expect to break ground on these communities in 2005."
"In Walton County, we received land use approvals for WaterSound West Beach (formerly referred to as DeerLake)," said Rummell. "In addition, the 1,060-unit WaterSound community located north of US 98 continues to make progress. Phase one of WaterSound has been approved and we expect to start infrastructure development in late 2004. We expect WaterSound to be an outstanding community in its own right, and it will build on the enthusiasm generated by WaterSound Beach and WaterColor. Although permitting steps remain, these communities will bring new inventory to one of Florida's hottest real estate markets."
"We benefit from very strong demographic trends," said Rummell. "More and more people are entering the key second and retirement home purchasing demographic, and we are working to have entitlements in place to meet that demand. Florida remains a favorite location for transitioning Baby Boomers, and we believe our proven place-making ability will make St. Joe communities special locations within Florida."
"This summer, we gained valuable exposure for our resort residential communities in Walton and Bay Counties through our partnership with Southern Progress, the publisher of Southern Living and Southern Accents magazines," said Rummell. "JOE homes are featured this month on the covers of these magazines that are read by our current target customers in the Southeastern United States. Southern Living features an Idea House at RiverCamps on Crooked Creek in its August issue, and Southern Accents features its 2004 Showhouse at WaterSound Beach in its July/August issue."
"We are well positioned to turn in another excellent year for our shareholders," said Rummell. "We continue to make outstanding progress laying the foundation for future value through the entitlements process. Finally, we are particularly pleased that Northwest Florida is beginning to get the recognition it deserves as a great place to live, work and play. Our goal is to ensure that all JOE developments preserve the best of Florida's character and quality of life."
OUTLOOK
Raising Guidance: Full Year 2004 to Exceed 2003 Baseline by 25 Percent or More
"Building on a very solid second quarter and with a strong pipeline of business, we look ahead to the remainder of this year with increased confidence," said Kevin M. Twomey, president, COO and CFO of JOE.
"In February, we made comparisons to 2003, excluding conservation land gains ($36.4 million pretax; $22.7 million net income), and the non-cash Advantis charge ($8.8 million deduction from net income)," said Twomey. "Excluding those items, 2003 'baseline' earnings per share was $0.80, as detailed in our earnings release in February. At that time, we expected the full year 2004 earnings per share, before conservation land gains, to increase by 10 to 15 percent over that adjusted 2003 total."
"In April, we raised these earnings expectations," said Twomey. "We said then that we expected our 2004 results to be at the high end of the range, or higher if certain potential transactions are consummated."
Full Year 2004 Expectations
"Based on the strong demand for our resort, residential, rural land and commercial real estate products, we are raising our expectations for the full year 2004," said Twomey. "We now expect the results for the full year 2004, before conservation land gains, to exceed 2003's baseline earnings per share of $0.80 by 25 percent or more."
Towns & Resorts
"Results from the St. Joe Towns & Resorts segment (formerly called the Community Development segment) are expected to continue to grow in the final six months of 2004," said Twomey. "Artisan Park and SummerCamp should be important contributors for the second half of the year. We continue to see excellent results at WaterColor. WaterSound Beach is also expected to perform well during the balance of 2004. Pricing has been particularly strong at both resort communities, and we will continue to make judgments about the rate that we release product for sale to maximize values."
Commercial Real Estate
"During the remainder of 2004 and into 2005, our commercial real estate division will focus on the development and sale of retail, multi-family and commercial properties in Northwest Florida," said Twomey. "We expect commercial pretax income from continuing operations for the year 2004 to be higher than 2003. The sale of a commercial building from our Development Properties inventory and another from our Investment Property Portfolio are expected to be important contributors to operating income for the commercial division in the second half of 2004."
"We have turned a corner with commercial development in Northwest Florida, particularly in Bay County," said Twomey. "There has been a marked change in the attitude of national retailers and commercial developers toward Northwest Florida and Panama City Beach in particular. We expect the pending land sale at Pier Park to the Simon Property Group to be a significant catalyst for additional success."
St. Joe Land
"St. Joe Land Company is expected to continue its strong performance for the remainder of the year," said Twomey. "Overall, we expect full-year 2004 results from St. Joe Land Company, excluding conservation land gains, to be well above the levels achieved in 2003."
"With respect to sales of conservation land, we had previously announced that we intended to sell a 44,000-acre parcel near St. Vincent Sound," said Twomey. "We are now evaluating alternative higher values and better uses for this land. We may determine that some of this land should be held or sold for non-conservation use, while offering selected portions for conservation sale. |
