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CST: 12/11/2019 11:57:01   

Consolidated-Tomoka Land Co. Reports Earnings of $0.31 Per Share for the Third Quarter of 2019

26 Days ago

DAYTONA BEACH, Fla., Oct. 16, 2019 (GLOBE NEWSWIRE) -- Consolidated-Tomoka Land Co. (NYSE American: CTO) (the “Company”) today announced its operating results and earnings for the quarter and nine months ended September 30, 2019.

QUARTER HIGHLIGHTS

Land Holdings

As announced earlier today, the Company closed on the sale of a controlling interest in a wholly-owned entity that holds the Company’s remaining land portfolio of approximately 5,300 acres (the “Land Venture”), including the land parcels the Company currently has under contract, to certain funds managed by Magnetar Capital (“Magnetar”) for total proceeds to the Company of approximately $97.0 million (the “Land Transaction”). The Company may, in the future, receive additional proceeds from the Land Venture in the form of distributions under certain circumstances, based upon the timing and amount realized when the land is ultimately sold by the Land Venture. There can be no assurance as to the likelihood or receiving such distributions, or the amount or timing thereof.

As a result of the Land Venture the Company has not provided an update of the land transaction pipeline in this earnings release.

Income Property Portfolio

In four separate transactions, acquired 4 single-tenant net lease retail properties for a total investment of approximately $49.5 million, reflecting a weighted average investment cap rate of approximately 6.32%. The four properties had a weighted average lease term of approximately 36.7 years.

Sold a 1.56-acre outparcel subject to a ground lease with Wawa, located in Winter Park, Florida, for a sales price of approximately $2.8 million for a gain of approximately $2.1 million, or $0.33 per share, after tax.

Commercial Loan Investment Portfolio

Originated a leasehold mortgage loan on the Carpenter Hotel totaling approximately $8.25 million with an interest rate of approximately 11.5%.

Book Value Per Share

Book value per share totaled $40.38 as of September 30, 2019; an increase of $1.44 per share, or nearly 4%, compared to year-end 2018.

Income Property Update

The following table provides a summary of the Company’s income property portfolio as of September 30, 2019 compared with the portfolio as of September 30, 2018:

  # of Properties Total Square Feet Average Remaining
Lease Term (Yrs.)
Property Type 2019 2018 2019 2018 2019 2018
Single-Tenant 48 29 2,014,490 1,561,053 11.8 9.1
Multi-Tenant 4 7 284,441 531,915 2.9 4.4
Total / Wtd. Avg. 52 36 2,298,931 2,092,968 11.0 7.8

Included in the aggregate investment of approximately $49.5 million, is the purchase of approximately 1.4 acres of land under the Carpenter Hotel in Austin, Texas, for approximately $16.25 million which is leased to the seller pursuant to a new 99-year ground lease (the “Ground Lease”). The Ground Lease includes annual escalations and certain future repurchase rights. Pursuant to FASB ASC Topic 842, Leases, due to the future repurchase rights, the Ground Lease does not qualify for treatment as a property purchase and has been accounted for on the consolidated balance sheets as an increase in commercial loan investments of approximately $16.25 million as of September 30, 2019 (the “Ground Lease Loan”). The Company has imputed interest on the Ground Lease Loan which is being recognized as interest income on commercial loan investments in the Company’s consolidated statements of operations.

Commercial Loan Investments Update

As of September 30, 2019, the Company’s commercial loan investment portfolio consisted of two loans totaling approximately $16.25 million in principal, including an $8.0 million first mortgage bridge loan secured by 72 acres of land in Orlando, Florida, and an $8.25 million leasehold mortgage loan on an upscale hotel property in Austin, Texas. The weighted average interest rate on the two loans was approximately 11.75% as of September 30, 2019 and the remaining term to maturity was 0.74 years, exclusive of the Ground Lease Loan.

Golf Operations Update

The Company is under contract to sell the Golf Operations to a third-party for a projected contract price in excess of the adjusted book value as of September 30, 2019. The transaction is expected to close in the fourth quarter of 2019.

Debt Summary

The following table provides a summary of the Company’s long-term debt as of September 30, 2019:

Component of Long-Term Debt   Principal Interest Rate Maturity Date
Revolving Credit Facility   $154.85 million 30-day LIBOR +
1.35% – 1.95%
May 2023
Mortgage Note Payable (1)   $24.06 million 3.17 % April 2021
Mortgage Note Payable   $30.00 million 4.33 % October 2034
Convertible Senior Notes   $75.00 million 4.50 % March 2020
Total Debt/Weighted-Average Rate   $283.91 million 4.00 %  

    (1)       Utilized interest rate swap to achieve fixed interest rate of 3.17%

OPERATING RESULTS

3rd Quarter ended September 30, 2019 (compared to same period in 2018):

      Increase (Decrease)
    For the
Quarter
vs Same Period in
2018
vs Same
Period in 2018
(%)
Net Income Per Share (basic)   $ 0.31 $ 0.26 520 %
Operating Income ($ millions)   $ 5.57 $ 1.19 27 %


      Increase (Decrease)
Operating Segment   Revenue for
the Quarter

($000’s)
vs Same Period in
2018

($000’s)
vs Same
Period in 2018
(%)
Income Properties   $ 10,261 $ 901   10 %
Interest Income from Commercial Loan Investments     855   814   1985 %
Real Estate Operations     632   (7,381 ) -92 %
Total Revenues   $ 11,748 $ (5,666 ) -33 %
           

The operating results in the 3rd Quarter ended September 30, 2019 were impacted by a 17% increase in general and administrative expenses as noted in the following summary (compared to the same period in 2018):

        Increase (Decrease)
    G&A for   Vs. Same Period   Vs. Same Period
    the Quarter   in 2018   in 2018
General and Administrative Expenses   ($000's)   ($000's)   (%)
Recurring General and Administrative Expenses   $ 1,648   $ 164     11 %
Non-Cash Stock Compensation     613     169     38 %
Total General and Administrative Expenses   $ 2,261   $ 333     17 %

For the Nine-Months ended September 30, 2019 (compared to same period in 2018):

      Increase (Decrease)
    For the Nine
Months   
vs Same Period in
2018
vs Same
Period in 2018
(%)
Net Income Per Share (basic)   $ 3.67 $ (0.93 ) -27 %
Operating Income ($ millions)   $ 34.7 $ (8.6 ) -20 %


      Increase (Decrease)
Operating Segment   Revenue for
the Nine Months   

($000’s)
vs Same Period in
2018

($000’s)
vs Same
Period in 2018
(%)
Income Properties   $ 31,361 $ 3,014   11 %
Interest Income from Commercial Loan Investments     908   292   47 %
Real Estate Operations     11,677   (12,821 ) -52 %
Total Revenues   $ 43,946 $ (9,515 ) -18 %
           

The operating results in the Nine Months ended September 30, 2019 benefited from a 4% reduction in general and administrative expenses as noted in the following summary (compared to the same period in 2018):

        Increase (Decrease)
    G&A for   Vs. Same Period   Vs. Same Period
    the Six Months   in 2018   in 2018
General and Administrative Expenses   ($000's)   ($000's)   (%)
Recurring General and Administrative Expenses   $ 4,698   $ (82 )     -2 %
Non-Cash Stock Compensation     2,059     602       41 %
Shareholder and Proxy Matter Legal and Related Costs     125     (819 )     -87 %
Total General and Administrative Expenses   $ 6,882   $ (299 )     -4 %

2019 Guidance

The following summary provides the Company’s guidance for the full year ending December 31, 2019:

    YTD Q3 2019
Actual
Guidance for
FY 2019
Earnings Per Share (Basic) (1)   $0.60 $6.75 - $7.50
Earnings from Dispositions   $3.07 $2.25 - $2.75
Acquisition of Income-Producing Assets   $90mm $80mm - $120mm
Target Investment Yields (Initial Yield – Unlevered)   6.45% 5.75% - 7.25%
Disposition of Income-Producing Assets (Sales Value)   $83mm $50mm - $100mm
Target Disposition Yields   6.13% 7.50% - 8.50%
Land Transactions (Sales Value) (2)   $108.1mm $50mm - $70mm
Leverage Target (as % of Total Enterprise Value) (2)(3)   30% 40%

    (1)       Excludes EPS from the disposition of the multi-tenant properties completed year-to-date in 2019.

    (2)       As of October 16, 2019

    (3)       Leverage as a percentage of Total Enterprise Value net of cash and 1031 restricted cash was approximately 46% as of September 30, 2019.

Announces Quarterly Dividend of $0.13 per Share

The Company’s Board of Directors declared a quarterly dividend of $0.13 per share payable on November 29, 2019, to shareholders of record on November 12, 2019, an increase of approximately 18% from the dividend paid in the third quarter of 2019.

Laura M. Franklin, Chairman of the Board, stated, “The Board is pleased that the operating results of the Company continue to support our dividend tradition that began in 1976.  The Board will continue to review its dividend strategy on a regular basis.”

3rd Quarter Earnings Conference Call & Webcast

The Company will host a conference call to present its operating results for the quarter and nine months ended September 30, 2019 on Thursday, October 17, 2019, at 9:00 a.m. eastern time. Shareholders and interested parties may access the earnings call via teleconference or webcast:

Teleconference: USA (Toll Free)   1-888-317-6003
International:   1-412-317-6061
Canada (Toll Free):   1-866-284-3684

Please dial in at least fifteen minutes prior to the scheduled start time and use the code 7721439 when prompted.

A webcast of the call can be accessed at: http://services.choruscall.com/links/cto191017.html.

To access the webcast, log on to the web address noted above or go to http://www.ctlc.com and log in at the investor relations section. Please log in to the webcast at least ten minutes prior to the scheduled time of the Earnings Call.

About Consolidated-Tomoka Land Co.

Consolidated-Tomoka Land Co. is a Florida-based publicly traded real estate company, which owns, as of October 16, 2019, a portfolio of income investments in diversified markets in the United States including approximately 2.3 million square feet of income properties. Visit our website at www.ctlc.com.

We encourage you to review our most recent investor presentation for the quarter and nine months ended September 30, 2019, and other presentations that are available on our website at www.ctlc.com.

SAFE HARBOR

Certain statements contained in this press release (other than statements of historical fact) are forward-looking statements. Words such as “believe,” “estimate,” “expect,” “intend,” “anticipate,” “will,” “could,” “may,” “should,” “plan,” “potential,” “predict,” “forecast,” “project,” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Although forward-looking statements are made based upon management’s expectations and beliefs concerning future developments and their potential effect upon the Company, a number of factors could cause the Company’s actual results to differ materially from those set forth in the forward-looking statements. Such factors may include the completion of 1031 exchange transactions, the modification of terms of certain land sales agreements, uncertainties associated with obtaining required governmental permits and satisfying other closing conditions, as well as the uncertainties and risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the Securities and Exchange Commission. There can be no assurance that future developments will be in accordance with management’s expectations or that the effect of future developments on the Company will be those anticipated by management.

CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED BALANCE SHEETS

    (Unaudited)      
    September 30,
2019
  December 31,
 2018
 
ASSETS            
Property, Plant, and Equipment:            
Income Properties, Land, Buildings, and Improvements   $ 472,444,875     $ 392,520,783  
Other Furnishings and Equipment     730,878       728,817  
Construction in Progress     412,543       19,384  
Total Property, Plant, and Equipment     473,588,296       393,268,984  
Less, Accumulated Depreciation and Amortization     (32,696,922 )     (24,518,215 )
Property, Plant, and Equipment—Net     440,891,374       368,750,769  
Land and Development Costs     23,520,982       25,764,633  
Intangible Lease Assets—Net     49,195,221       43,555,445  
Assets Held for Sale     4,502,635       75,866,510  
Investment in Joint Venture     6,850,594       6,788,034  
Impact Fee and Mitigation Credits     447,596       462,040  
Commercial Loan Investments     32,419,693        
Cash and Cash Equivalents     5,411,727       2,310,489  
Restricted Cash     6,213,295       19,721,475  
Refundable Income Taxes           225,024  
Other Assets     14,008,249       12,885,453  
Total Assets   $ 583,461,366     $ 556,329,872  
LIABILITIES AND SHAREHOLDERS’ EQUITY            
Liabilities:            
Accounts Payable   $ 2,624,096     $ 1,036,547  
Accrued and Other Liabilities     5,627,474       5,197,884  
Deferred Revenue     7,457,665       7,201,604  
Intangible Lease Liabilities—Net     26,059,614       27,390,350  
Liabilities Held for Sale     1,729,049       1,347,296  
Income Taxes Payable     112,896        
Deferred Income Taxes—Net     58,761,619       54,769,907  
Long-Term Debt     282,087,031       247,624,811  
Total Liabilities     384,459,444       344,568,399  
Commitments and Contingencies            
Shareholders’ Equity:            
Common Stock – 25,000,000 shares authorized; $1 par value, 6,075,462 shares issued and 4,927,728 shares outstanding at September 30, 2019; 6,052,209 shares issued and 5,436,952 shares outstanding at December 31, 2018     6,015,867       5,995,257  
Treasury Stock – 1,147,734 shares at September 30, 2019; 615,257 shares at December 31, 2018     (63,441,664 )     (32,345,002 )
Additional Paid-In Capital     26,062,021       24,326,778  
Retained Earnings     230,284,293       213,297,897  
Accumulated Other Comprehensive Income     81,405       486,543  
Total Shareholders’ Equity     199,001,922       211,761,473  
Total Liabilities and Shareholders’ Equity   $ 583,461,366     $ 556,329,872  


CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

  Three Months Ended Nine Months Ended
  September 30, September 30, September 30, September 30,
   2019    2018   2019    2018  
Revenues                              
Income Properties $ 10,260,831     $ 9,360,155     $ 31,360,544     $ 28,347,181  
Interest Income from Commercial Loan Investments   855,559       41,262       908,324       615,728  
Real Estate Operations   631,741       8,012,509       11,677,413       24,498,527  
Total Revenues   11,748,131       17,413,926       43,946,281       53,461,436  
Direct Cost of Revenues                              
Income Properties   (1,476,288 )     (1,773,840 )     (5,043,496 )     (5,677,758 )
Real Estate Operations   (342,148 )     (5,577,491 )     (6,448,016 )     (7,993,767 )
Total Direct Cost of Revenues   (1,818,436 )     (7,351,331 )     (11,491,512 )     (13,671,525 )
General and Administrative Expenses   (2,260,728 )     (1,928,008 )     (6,881,524 )     (7,180,737 )
Depreciation and Amortization   (4,286,836 )     (3,756,507 )     (11,707,710 )     (11,308,876 )
Total Operating Expenses   (8,366,000 )     (13,035,846 )     (30,080,746 )     (32,161,138 )
Gain on Disposition of Assets   2,187,332             20,869,196       22,035,666  
Total Operating Income   5,569,463       4,378,080       34,734,731       43,335,964  
Investment and Other Income   33,048       14,179       86,363       38,383  
Interest Expense   (3,253,908 )     (2,345,156 )     (9,219,195 )     (7,443,922 )
Income from Continuing Operations Before Income Tax  Expense   2,348,603       2,047,103       25,601,899       35,930,425  
Income Tax Expense from Continuing Operations   (595,144 )     (561,223 )     (6,459,234 )     (9,016,556 )
Net Income from Continuing Operations   1,753,459       1,485,880       19,142,665       26,913,869  
Loss from Discontinued Operations (Net of Income Tax)   (267,437 )     (1,189,708 )     (591,746 )     (1,542,490 )
Net Income $ 1,486,022     $ 296,172     $ 18,550,919     $ 25,371,379  
                               
Weighted Average Common Shares Outstanding:                
Basic   4,868,133       5,491,181       5,053,407       5,516,989  
Diluted   4,868,133       5,493,367       5,054,218       5,548,425  
                 
Per Share Information:                
Basic:                
Net Income from Continuing Operations $ 0.36     $ 0.27     $ 3.79     $ 4.88  
Net Loss from Discontinued Operations (Net of Income Tax)   (0.05 )     (0.22 )     (0.12 )     (0.28 )
Basic Net Income Per Share $ 0.31     $ 0.05     $ 3.67     $ 4.60  
                               
Diluted:                
Net Income from Continuing Operations $ 0.36     $ 0.27     $ 3.79     $ 4.85  
Net Loss from Discontinued Operations (Net of Income Tax)   (0.05 )     (0.22 )     (0.12 )     (0.28 )
Diluted Net Income Per Share $ 0.31     $ 0.05     $ 3.67     $ 4.57  
                               
Dividends Declared and Paid $ 0.11     $ 0.07     $ 0.31     $ 0.19  


     
Contact:   Mark E. Patten, Sr. Vice President and CFO
mpatten@ctlc.com
Phone:   (386) 944-5643
Facsimile:   (386) 274-1223

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