The Q1 2008 Earnings Call Transcript was posted on the 6th.
Reported was an increase in net income up to $32.1 million from $19.7 million first quarter 2007. This increase was mostly attributed to strong rural land sales.
Significant progress in four areas was noted:
- Construction has begun on the new Panama City – Bay County International Airport following favorable jurisdictional decisions
- The completion of a successful equity offering that virtually eliminated all debt (the sale of 17 million common shares of stock – apprx $580 million)
- 57,000+ acres of non-strategic rural lands were sold for more than $91 million
- A new CEO will be appointed next week, Britt Greene
Peter Rummell was quoted, “we’re taking important steps to be properly positioned when [the markets improve]. . . we have become a leaner, more nimble company.”
“At the construction site of the new Panama City Airport, at West Bay, the first quarter saw the combination of a decade of hard work. Each day the airport authority continues, construction brings us one day closer to a new airport capable of tracking better our service and stronger economic development for the region.
It also brings us closer to the permanent protection of West Bay in the establishment of the West Bay preservation area. So far, as we’ve reported, the projects has survived several legal challenges. Since last fall, the few Airport opponents that remain have filed suits in three different federal courts in an effort to hold or delay the relocation of the Airport. To date, these courts have consistently issued rulings allowing construction to continue. The airport authority continues to estimate that the new airport will open in last spring, 2010 barring unexpected delays or additional legal challenges.
In preparation of the beginning of the airport, Coastal Vision 3000, a rapidly growing business group with members from across Northwest Florida, has initiated a regional effort to attract improved air service to Northwest Florida. Now that the airport is under construction tracking new air service becomes a primary focus for the region and is a key component of JOE’s efforts to drive demand for real estate in Northwest Florida. We learned early on in this process, but until the Airport was actually under construction. Airlines had little interest in talking to us. So now those conversations are well under way with both domestic and international carriers.”
Britt Greene, the new CEO reported that they continue to see interest for large recreational land, conservation and pension funds, but that resort and primary residential markets remain weak. Resort and primary residential sales only generated $9.7 million in the Q1 2008. Greene also said that they expect commercial land sales to remain slow through the rest of the year.
“At the end of the first quarter, JOE owned approximately 638,000 acres concentrated primarily in North West Florida. Approximately, 430,000 or 68%, of JOE’s total land holdings are located within 15 miles of the coast of the Gulf of Mexico. We have approximately 46,200 land used land-use entitlements in hand or in process totaled and about 14.5 million square feet of commercial space as well as an additional 611 acres with land use entitlements for commercial purposes.”
William McCalmont, the CFO, reported that in April they paid off $240 million in senior notes which made them virtually debt free. They had no cash drawn on their $500 million line at the end of Q1 2008 with around $480 million available.
Costs are way down from $75 million in the first quarter of 2007 to only $18 million in the first quarter of this year. They spent $84 million in the first quarter 2006.
Peter Rummell – “Resort and residential markets are particularly weak, inventories remain high. Inventories seem to be ranging from, anywhere from 12 to 48 months supply, depending on what part of the stage you’re talking about and the specific market. And looking ahead, we think there is a convergence of events to that we will see in 2010, there will be an important and telling moment for Northwest Florida and for JOE. On this conference call, two years from today, we will be talking about the grand opening and first flights for the new Panama City Airport. And by that time, 24 months from now many economists think that economic conditions in general will be improving.”
The Alabama/Florida Toll Road was mentioned and it was discussed that it was an idea that has been around for decades that has gotten some recent visibility. Rummell said that it was in the very early stages of planning and that Joe has been in some discussion but that much still has to happen for that plan to begin to materialize.Print Story