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Section 1: 8-K (8-K)

cto_Current_Folio_8-K_Earnings_04162019

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8‑K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 16, 2019

Consolidated-Tomoka Land Co.

(Exact name of registrant as specified in its charter)

 

 

 

Florida
(State or other jurisdiction of
incorporation)

001‑11350
(Commission File Number)

59‑0483700
(IRS Employer Identification No.)

 

 

 

 

1140 N Williamson Blvd.,
Suite 140
Daytona Beach, Florida
(Address of principal executive offices)

32114
(Zip Code)

 

Registrant’s telephone number, including area code: (386) 274‑2202

 

Not Applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)

☐ Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b))

☐ Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b‑2 of the Securities Exchange Act of 1934 (§240.12b‑2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 


 

Item 2.02. Results of Operations and Financial Condition

On April 16, 2019, Consolidated-Tomoka Land Co., a Florida corporation (the "Company"), issued a press release relating to the Company’s earnings for the quarter ended March 31, 2019. A copy of the press release is furnished as an exhibit to this report.

Item 9.01. Financial Statements and Exhibits

The following exhibit is furnished herewith pursuant to Item 2.02 of this Report and shall not be deemed to be “filed” for any purpose, including for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

(d) Exhibits

 

 

    

99.1 Press Release dated April 16, 2019

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Company Name

 

 

 

 

Date: April 16, 2019

By:

 

/s/ Mark E. Patten

 

 

 

Mark E. Patten,

 

 

 

Senior Vice President and Chief Financial Officer

 


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Section 2: EX-99.1 (EX-99.1)

cto_Ex99_1

Exhibit 99.1

 

Picture 2

 

Press

Release

 

 

 

Contact:

Mark E. Patten, Sr. Vice President and CFO

 

mpatten@ctlc.com

Phone:

(386) 944-5643

Facsimile:

(386) 274-1223

 

 

 

 

 

 

 

FOR

IMMEDIATE

RELEASE

CONSOLIDATED-TOMOKA LAND CO. REPORTS

EARNINGS OF $1.21 PER SHARE FOR THE FIRST QUARTER OF 2019

 

DAYTONA BEACH, Fla. – April 16, 2019  –  Consolidated-Tomoka Land Co. (NYSE American: CTO) (the “Company”) today announced its operating results and earnings for the quarter ended March 31, 2019.

QUARTER HIGHLIGHTS

Land Holdings

Closed Transaction: one land sale of approximately 10 acres for a sales price of $3.3 million, or approximately  $333,000 per acre, for a gain of approximately $2.3 million, or $0.32 per share, after tax.

Land Pipeline:  fifteen (15)  contracts; more than 3,200 acres, or approximately 60%;  potential proceeds of more than  $93 million, or average sales price of approximately $29,000 per acre.

Income Property Portfolio

First quarter 2019 revenues increased approximately 16% over the same period in 2018.

Sold one multi-tenant income property, located in Sarasota, Florida for a sales price of approximately $24.6 million for a gain of approximately $6.9 million, or $0.96 per share, after tax.

Share Repurchase Program

In January 2019 the Board authorized a  $10 million increase to stock buyback program.

From January 1, 2019 through March 31, 2019: Repurchased 70,708 shares for approximately $4.1 million; average purchase price of $58.34 per share.

Book Value Per Share

Book value per share totaled  $39.72 as of March 31, 2019;  increase of $0.77 per share, or 2%, compared to year-end 2018.

SUBSEQUENT EVENTS

On April 10, 2019, the Company repurchased 320,741 shares of the Company’s common stock (the “Block Share Repurchase”), or approximately 6% of the Company’s outstanding shares, for approximately $18.4 million, as part of the disposition of the entire position owned by its largest shareholder.


 

The Block Share Repurchase was completed outside of the Company’s existing $10 million buyback program.

 

Income Property Update

 

The following table provides a summary of the Company’s income property portfolio as of March 31, 2019 compared with the portfolio as of March 31, 2018:

 

 

 

 

 

 

 

 

 

# of Properties

Total Square Feet

Average Remaining
Lease Term (Yrs.)

Property Type

2019

2018

2019

2018

2019

2018

Single-Tenant

40

29

1,829,276

1,561,053

9.4

9.6

Multi-Tenant

6

7

472,574

531,915

4.3

3.9

Total / Wtd. Avg.

46

36

2,301,850

2,092,968

8.4

8.0

 

Land Pipeline Update

As of April  15, 2019, the Company’s pipeline of potential land sales transactions includes the following fifteen (15) potential transactions with thirteen (13) different buyers, representing over 3,200 acres or approximately 60% of our remaining approximately 5,400 acres of land holdings:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Transaction (Buyer)

    

Acres

    

Amount
($000’s)

    

Price Per
Acre
($ Rounded)

    

Estimated
Timing

 

1

 

Residential (SF) – Parcel A – West of I-95

 

1,599 

 

$

27.0mm

 

$

17,000 

 

’19 - ‘20

 

2

 

Residential (SF) – ICI Homes – West of I-95

 

1,016 

 

$

21.5mm

 

$

21,000 

 

‘19

 

3

 

Commercial/Medical Office – East of I-95

 

32 

 

$

8.1mm

 

$

253,000 

 

’19 - ‘20

 

4

 

Residential (MF) – East of I-95

 

38 

 

$

6.1mm

 

$

161,000 

 

Q4 ’19

 

5

 

Commercial/Residential – Unicorp Dev. – East of I-95

 

31 

 

$

4.6mm

 

$

148,000 

 

’19 - ‘20

 

6

 

Commercial/Residential – East of I-95

 

12 

 

$

4.5mm

 

$

375,000 

 

’19 - ‘20

 

7

 

Residential (MF) – East of I-95

 

23 

 

$

4.0mm

 

$

174,000 

 

’19 - ‘20

 

8

 

Commercial/Residential – Unicorp Dev. – East of I-95

 

14 

 

$

3.8mm

 

$

271,000 

 

’19 - ‘20

 

9

 

Commercial/Residential – NADG – East of I-95

 

13 

 

$

3.0mm

 

$

231,000 

 

’19

 

10

 

Residential (Sr. Housing) – East of I-95

 

13 

 

$

2.6mm

 

$

200,000 

 

’19 - ‘20

 

11

 

Residential (SF) - West of I-95

 

98 

 

$

2.6mm

 

$

27,000 

 

’19 - ‘20

 

12

 

Residential (MF)/Retail – East of I-95

 

19 

 

$

2.0mm

 

$

105,000 

 

‘20

 

13

 

Residential (SF) – ICI Homes – West of I-95

 

146 

 

$

1.7mm

 

$

11,000 

 

’19

 

14

 

Borrow Pit – West of I-95

 

149 

 

$

1.6mm

 

$

11,000 

 

’19 - ‘20

 

15

 

Compensating Storage Pond – East of I-95

 

38 

 

$

0.7mm

 

$

19,000 

 

’19

 

 

 

Totals (Average)

 

3,241 

 

$

93.7mm

 

$

29,000 

 

 

 

 

As noted above, these agreements contemplate closing dates ranging from 2019 through fiscal year 2020, and although we anticipate that some of the transactions may close in 2019,  some of the buyers may not be contractually obligated to close until after 2019. Each of the transactions are in varying stages of due diligence by the various buyers including, in some instances, making submissions to the planning and development departments of the City of Daytona Beach, pursuing permitting activities with other applicable governmental authorities including wetlands permits from the St. John’s River Water Management District and the U.S. Army Corps of Engineers,  conducting traffic analyses to determine potential road impact requirements with the Florida Department of Transportation, and negotiating other matters with Volusia County. In addition to other customary closing conditions, the majority of these transactions are conditioned upon the receipt of approvals or permits from those various governmental authorities, as well as other matters that are beyond our control. If such approvals are not obtained or costs to meet governmental requirements or obligations are too high, the prospective buyers may have the ability to terminate their respective agreements prior to closing. As a result, there can be no assurances regarding the likelihood or timing of any one of these potential land transactions being completed or the final terms thereof, including the sales price.

 


 

Debt Summary

The following table provides a summary of the Company’s long-term debt as of March 31, 2019:

 

 

 

 

 

 

 

 

 

 

Component of Long-Term Debt

    

Principal

    

Interest Rate

    

Maturity Date

 

Revolving Credit Facility

 

$

79.84 million

 

30-day LIBOR + 1.50% – 2.20%         

 

September 2021

 

Mortgage Note Payable (1)

 

$

24.39 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

 

$

209.23 million

 

4.13 

%  

 

 

 


(1)

Utilized interest rate swap to achieve fixed interest rate of 3.17%

 

On April 10, 2019, the Company funded the Block Share Repurchase utilizing approximately $18.4 million of capacity on its Revolving Credit Facility (as part of a $20 million draw) to acquire 320,741 shares from the Company’s largest shareholder.

 

OPERATING RESULTS

1st Quarter ended March 31, 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)

 

$

1.21

 

$

(0.76)

 

-39

%

Operating Income ($ millions)

 

$

11.72

 

$

(5.39)

 

-32

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Increase (Decrease)

 

Operating Segment

    

Revenue for
the Quarter
($000’s)

    

vs Same Period in 2018
($000’s)

    

vs Same
Period in 2018
(%)

 

Income Properties

 

$

10,724 

 

$

1,518 

 

16 

%

Interest Income from Commercial Loan Investments

 

 

 

 

(301)

 

-100 

%

Real Estate Operations

 

 

3,535 

 

 

(10,455)

 

-75 

%

Total Revenues

 

$

14,259 

 

$

(9,238)

 

-39 

%

 

The operating results in the 1st Quarter ended March 31, 2019 benefited from an 11% 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 Quarter

 

in 2018

 

in 2018

 

General and Administrative Expenses

    

($000's)

    

($000's)

    

(%)

 

Recurring General and Administrative Expenses

 

$

1,890

 

$

57

 

 

%

Non-Cash Stock Compensation

 

 

539

 

 

71

 

 

15 

%

Shareholder and Proxy Matter Legal and Related Costs

 

 

73

 

 

(450)

 

 

-86 

%

Total General and Administrative Expenses

 

$

2,502

 

$

(322)

 

 

-11 

%

 


 

2019 Guidance

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

 

 

 

 

 

 

 

 

 

 

    

Q1 2019
Actual

    

Guidance for
FY 2019

 

Earnings Per Share (Basic) (1) (2)

 

$

0.25 

 

$

6.75 - $7.50

 

Earnings from Dispositions

 

$

0.96 

 

$

2.25 - $2.75

 

Acquisition of Income-Producing Assets

 

 

 

$

80mm - $120mm

 

Target Investment Yields (Initial Yield – Unlevered)

 

 

 

 

5.75% - 7.25

%

Disposition of Income-Producing Assets (Sales Value)

 

$

24.6mm

 

$

50mm - $100mm

 

Target Disposition Yields

 

 

5.15 

%  

 

7.50% - 8.50

%

Land Transactions (Sales Value)

 

$

3.3mm

 

$

50mm - $70mm

 

Leverage Target (as % of Total Enterprise Value)

 

 

39 

%  

 

40 

%


(1)

Reaching full year target heavily dependent upon closing of certain land transactions

(2)

Excludes EPS from the disposition of the multi-tenant property in Sarasota, Florida completed in Q1 2019, and potential EPS from the disposition of other multi-tenant income properties included in the 2019 guidance.

 

1st Quarter Earnings Conference Call & Webcast

The Company will host a conference call to present its operating results for the quarter ended March 31, 2019 on Wednesday,  April 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 5412999 when prompted.

 

A webcast of the call can be accessed at: http://services.choruscall.com/links/cto190417.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 April  16, 2019, a portfolio of income investments in diversified markets in the United States including approximately 2.3 million square feet of income properties, as well as approximately 5,400 acres of land in the Daytona Beach area. Visit our website at www.ctlc.com.

 

We encourage you to review our most recent investor presentation for the quarter ended March 31, 2019, 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)

    

    

 

 

 

March 31,
2019

 

December 31,
2018

 

ASSETS

 

 

 

 

 

 

 

Property, Plant, and Equipment:

 

 

 

 

 

 

 

Income Properties, Land, Buildings, and Improvements

 

$

392,552,156 

 

$

392,520,783 

 

Other Furnishings and Equipment

 

 

730,878 

 

 

728,817 

 

Construction in Progress

 

 

46,017 

 

 

19,384 

 

Total Property, Plant, and Equipment

 

 

393,329,051 

 

 

393,268,984 

 

Less, Accumulated Depreciation and Amortization

 

 

(26,737,672)

 

 

(24,518,215)

 

Property, Plant, and Equipment—Net

 

 

366,591,379 

 

 

368,750,769 

 

Land and Development Costs

 

 

25,745,482 

 

 

25,764,633 

 

Intangible Lease Assets—Net

 

 

42,315,994 

 

 

43,555,445 

 

Assets Held for Sale

 

 

59,078,667 

 

 

75,866,510 

 

Investment in Joint Venture

 

 

6,797,549 

 

 

6,788,034 

 

Impact Fee and Mitigation Credits

 

 

447,596 

 

 

462,040 

 

Cash and Cash Equivalents

 

 

2,682,205 

 

 

2,310,489 

 

Restricted Cash

 

 

1,336,361 

 

 

19,721,475 

 

Refundable Income Taxes

 

 

— 

 

 

225,024 

 

Other Assets

 

 

13,512,025 

 

 

12,885,453 

 

Total Assets

 

$

518,507,258 

 

$

556,329,872 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

Accounts Payable

 

$

990,363 

 

$

1,036,547 

 

Accrued and Other Liabilities

 

 

4,268,927 

 

 

5,197,884 

 

Deferred Revenue

 

 

6,622,253 

 

 

7,201,604 

 

Intangible Lease Liabilities—Net

 

 

26,697,074 

 

 

27,390,350 

 

Liabilities Held for Sale

 

 

1,641,985 

 

 

1,347,296 

 

Income Taxes Payable

 

 

1,465,653 

 

 

— 

 

Deferred Income Taxes—Net

 

 

55,880,337 

 

 

54,769,907 

 

Long-Term Debt

 

 

206,991,712 

 

 

247,624,811 

 

Total Liabilities

 

 

304,558,304 

 

 

344,568,399 

 

Commitments and Contingencies

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

 

 

Common Stock – 25,000,000 shares authorized; $1 par value, 6,072,588 shares issued and 5,386,623 shares outstanding at March 31, 2019; 6,052,209 shares issued and 5,436,952 shares outstanding at December 31, 2018

 

 

6,012,993 

 

 

5,995,257 

 

Treasury Stock – 685,965 shares at March 31, 2019; 615,257 shares at December 31, 2018

 

 

(36,470,196)

 

 

(32,345,002)

 

Additional Paid-In Capital

 

 

24,817,328 

 

 

24,326,778 

 

Retained Earnings

 

 

219,231,100 

 

 

213,297,897 

 

Accumulated Other Comprehensive Income

 

 

357,729 

 

 

486,543 

 

Total Shareholders’ Equity

 

 

213,948,954 

 

 

211,761,473 

 

Total Liabilities and Shareholders’ Equity

 

$

518,507,258 

 

$

556,329,872 

 

 


 

 

CONSOLIDATED-TOMOKA LAND CO.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

    

Three Months Ended

 

 

 

March 31,

 

March 31,

 

 

    

2019 

    

2018 

 

Revenues

 

 

 

 

 

 

 

Income Properties

 

$

10,724,418 

 

$

9,205,727 

 

Interest Income from Commercial Loan Investments

 

 

-

 

 

300,999 

 

Real Estate Operations

 

 

3,534,901 

 

 

13,990,517 

 

Total Revenues

 

 

14,259,319 

 

 

23,497,243 

 

Direct Cost of Revenues

 

 

 

 

 

 

 

Income Properties

 

 

(1,932,488)

 

 

(1,869,029)

 

Real Estate Operations

 

 

(1,625,269)

 

 

(1,540,834)

 

Total Direct Cost of Revenues

 

 

(3,557,757)

 

 

(3,409,863)

 

General and Administrative Expenses

 

 

(2,501,620)

 

 

(2,823,548)

 

Depreciation and Amortization

 

 

(3,346,287)

 

 

(3,796,823)

 

Total Operating Expenses

 

 

(9,405,664)

 

 

(10,030,234)

 

Gain on Disposition of Assets

 

 

6,869,957 

 

 

3,650,858 

 

Operating Income

 

 

11,723,612 

 

 

17,117,867 

 

Investment Income

 

 

38,755 

 

 

12,312 

 

Interest Expense

 

 

(2,923,229)

 

 

(2,561,465)

 

Income from Continuing Operations Before Income Tax Expense

 

 

8,839,138 

 

 

14,568,714 

 

Income Tax Expense from Continuing Operations

 

 

(2,210,802)

 

 

(3,558,599)

 

Net Income from Continuing Operations

 

 

6,628,336 

 

 

11,010,115 

 

Loss from Discontinued Operations (Net of Income Tax)

 

 

(160,237)

 

 

(97,816)

 

Net Income

 

$

6,468,099 

 

$

10,912,299 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding:

 

 

 

 

 

 

 

Basic

 

 

5,345,870 

 

 

5,530,864 

 

Diluted

 

 

5,345,870 

 

 

5,561,900 

 

 

 

 

 

 

 

 

 

Per Share Information:

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

1.24 

 

$

1.99 

 

Loss from Discontinued Operations

 

 

(0.03)

 

 

(0.02)

 

Basic Net Income Per Share

 

$

1.21 

 

$

1.97 

 

 

 

 

 

 

 

 

 

Income from Continuing Operations

 

$

1.24 

 

$

1.98 

 

Loss from Discontinued Operations

 

 

(0.03)

 

 

(0.02)

 

Diluted Net Income Per Share

 

$

1.21 

 

$

1.96 

 

 

 

 

 

 

 

 

 

Dividends Declared and Paid

 

$

0.10 

 

$

0.06 

 

 


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