<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
Commission file number 1-10466
St. Joe Corporation
-------------------
(Exact name of registrant as specified in its charter)
Florida 59-0432511
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 400, 1650 Prudential Drive, Jacksonville, Florida 32207
(Address of principal executive offices) (Zip Code)
(904) 396-6600
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of June 30, 1997 there were 30,565,937 shares of common stock, no par value,
outstanding.
<PAGE> 2
ST. JOE CORPORATION
INDEX
<TABLE>
<CAPTION>
Page No.
<S> <C>
PART I Financial Information:
Consolidated Balance Sheet -
June 30, 1997 and December 31, 1996 3
Consolidated Statements of Income and
Retained Earnings - Three months and six months
ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows -
Six months ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
Management's Discussion and Analysis of
Consolidated Financial Condition and
Results of Operations 9
PART II Other Information
Exhibits and Reports on Form 8-K 13
</TABLE>
<PAGE> 3
ST. JOE CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
(Unaudited)
ASSETS
Current Assets:
<S> <C> <C>
Cash & cash equivalents $ 172,111 $ 449,013
Short-term investments 28,437 88,011
Accounts receivable 44,548 57,517
Inventory 13,101 18,677
Other assets 26,257 17,455
----------- -----------
Total current assets 284,453 630,673
Investment & Other Assets:
Marketable securities 357,570 282,827
Other assets 61,292 58,571
----------- -----------
Total investment and other assets 418,862 341,398
Property, plant & equipment 1,168,329 1,156,642
Accumulated depreciation (322,280) (322,475)
----------- -----------
Net property, plant & equipment 846,049 834,167
=========== ===========
Total assets $ 1,549,364 $ 1,806,238
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 24,324 $ 28,480
Accrued liabilities 21,794 21,615
Income tax payable 1,375 6,864
----------- -----------
Total current liabilities 47,492 56,959
Accrued casualty reserves and other liabilities 19,575 18,185
Deferred income taxes 271,514 254,873
Minority interest in consolidated subsidiaries 286,782 279,280
Stockholders' Equity:
Common stock, no par value; 60,000,000 shares 13,054 8,714
authorized; 30,565,937 and 30,498,650 issued
and outstanding at June 30, 1997 and
December 31, 1996, respectively
Retained earnings 835,669 1,125,161
Net unrealized gains on marketable securities
available for sale 79,184 63,066
Restricted stock deferred compensation (3,906) --
----------- -----------
Total stockholders' equity 924,001 1,196,941
----------- -----------
Total liabilities and stockholders' equity $ 1,549,364 $ 1,806,238
=========== ===========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
ST. JOE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales $ 48,526 $ 33,195 $ 68,518 $ 158,714
Operating revenues 45,575 46,995 113,962 92,438
------------------------------------------------------
Total revenues 94,102 80,190 182,481 251,152
Cost of sales 44,114 16,394 57,908 50,670
Operating expenses 23,914 35,213 78,548 69,865
Selling, general and
administrative expenses 10,200 5,830 19,896 14,766
------------------------------------------------------
Operating profit 15,874 22,753 26,129 115,851
Other income (expense):
Dividends 858 1,009 1,656 1,715
Interest income 5,636 6,493 15,237 10,553
Interest expense (150) (257) (241) (324)
Gain on sales and other dispositions of property 3,024 125 3,098 2,936
Other, net 1,308 1,508 2,792 3,205
------------------------------------------------------
Total other income (expense) 10,676 8,878 22,542 18,085
------------------------------------------------------
Income before income taxes and minority interest 26,550 31,631 48,671 133,936
Income tax expense 11,275 22,875 21,549 62,072
------------------------------------------------------
Income before minority interest 15,274 8,756 27,121 71,864
Minority interest (4,060) (2,966) (7,897) (6,395)
------------------------------------------------------
Income from continuing operations 11,214 5,790 19,224 65,469
------------------------------------------------------
Income from discontinued operations:
Earnings (loss) from discontinued operations
(net of income taxes of ($4,448) and $527) -- (8,143) -- 746
Gain on sale of discontinued operations, net of
income taxes of $61,638, respectively -- 90,370 90,370
--
------------------------------------------------------
Net income 11,214 88,017 19,224 156,585
Retained earnings at beginning of period 825,983 1,022,282 1,125,161 955,239
Dividends (1,528) (1,525) (308,716) (3,050)
------------------------------------------------------
Retained earnings at end of period $ 835,669 $ 1,108,774 $ 835,669 $ 1,108,774
======================================================
PER SHARE DATA:
Income from continuing operations $ 0.37 $ 0.19 $ 0.63 $ 2.15
Earnings from discontinued operations -- 2.70 -- 2.98
------------------------------------------------------
Net income $ 0.37 $ 2.89 $ 0.63 $ 5.13
======================================================
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
ST. JOE CORPORATION
CONSOLIDATED STATEMENT OF CASHFLOWS
(Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Six months
ended June 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 19,224 $ 156,585
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and depletion 14,837 13,652
Minority interest in income 7,897 6,395
Gains on sales of property (3,098) (2,936)
Gain on sale of discontinued operations -- (90,370)
Amortization of deferred compensation 434 --
Increase in deferred income taxes 6,009 6,779
Changes in operating assets and liabilities:
Accounts receivable 12,969 (1,492)
Inventories 5,576 (5,454)
Other assets (11,523) (23,168)
Accounts payable, accrued liabilities and casualty reserves (2,153) 43,386
Income taxes payable (5,489) 29,335
Discontinued operations-noncash charges
and working capital changes -- 12,165
--------- ---------
Cash provided by operating activities 44,684 144,877
Cash flows from investing activities:
Purchases of property, plant and equipment (32,836) (31,116)
Investing activities of discontinued operations -- --
Purchases of investments:
Available for sale (12,877) (14,515)
Held to maturity (98,337) (118,171)
Proceeds from dispositions of assets 9,215 4,806
Proceeds from sale of discontinued operations -- 479,937
Maturities and redemptions of investments:
Available for sale 10,958 8,420
Held to maturity 111,836 70,421
--------- ---------
Cash used in investing activities (12,041) 399,782
Cash flows from financing activities:
Dividends paid to stockholders (308,716) (3,050)
Dividends paid to minority interest (830) (830)
--------- ---------
Cash used in financing activities (309,546) (3,880)
Net increase (decrease) in cash and cash equivalents (276,902) 540,779
Cash and cash equivalents at beginning of period 449,013 16,802
--------- ---------
Cash and cash equivalents at end of period $ 172,111 $ 557,581
========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 241 $ 733
Income taxes $ 10,028 $ 23,136
</TABLE>
See notes to consolidated financial statements.
<PAGE> 6
ST. JOE CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
1. The accompanying unaudited interim financial statements have been prepared
pursuant to the rules and regulations for reporting on Form 10-Q.
Accordingly, certain information and footnotes required by generally
accepted accounting principles for complete financial statements are not
included herein. The interim statements should be read in conjunction with
the financial statements and notes thereto included in the Company's
latest Annual Report on Form 10-K. In the opinion of the Company, the
accompanying unaudited consolidated financial statements contain all
adjustments (consisting of only normal recurring accruals) necessary to
present fairly the financial position as of June 30, 1997 and December 31,
1996 and the results of operations and cash flows for the six month
periods ended June 30, 1997 and 1996. The results of operations for the
six month periods ended June 30, 1997 and 1996 are not necessarily
indicative of the results that may be expected for the full year.
2. On April 11, 1996, St. Joe Industries, Inc., a wholly owned subsidiary of
the Company, sold the stock of St. Joe Communications, Inc. (SJCI) to TPG
Communications, Inc. SJCI also sold its interest in four cellular
partnerships. These sales represent the Company's entire Communication
segment. On May 30, 1996, the Company sold its linerboard mill and
container plants. The Company retained its forestry operation. Net
operating results of the Communications segment and for the linerboard
mill and container plants for the three month and six month periods ended
June 30, 1997 and 1996 were shown as earnings from discontinued operations
in the accompanying statement of income and retained earnings.
3. The Company and its subsidiaries are involved in litigation on a number of
matters and are subject to certain claims which arise in the normal course
of business, none of which, in the opinion of management, is expected to
have a material adverse effect on the Company's consolidated financial
position or results of operations.
The Company has retained certain self-insurance risks with respect to
losses for third party liability, property damage and group health
insurance provided to employees.
The Company has been notified that certain contracts for the purchase of
natural gas in Port St. Joe, Florida, are not being fully honored by the
new linerboard mill owners. As a result, the natural gas supplier, St. Joe
Natural Gas Company, is attempting to seek remedies from the Company. The
contracts were assigned by the Company to the purchaser of the mill at the
time of the sale. The Company believes all rights and responsibilities
under these contracts were fully assumed by the new mill owners. The
Company will continue to vigorously assert this position.
The Company is subject to costs arising out of environmental laws and
regulations, which include obligations to remove or limit the effects on
the environment of the disposal or release of certain wastes or substances
at various sites, including sites which have previously been sold. It is
the Company's policy to accrue and charge against earnings environmental
cleanup costs when it is probable that a liability has been incurred and
an amount is reasonably estimable. As assessments and cleanups proceed,
these accruals are reviewed and adjusted, if necessary, as additional
information becomes available.
The Company is currently a party to, or involved in, legal proceedings
directed at the cleanup of Superfund sites. The Company has accrued an
allocated share of the total estimated cleanup costs for these sites. Based
upon management's evaluation of the other potentially responsible parties,
the Company does not expect to incur additional amounts even though the
Company has
6
<PAGE> 7
joint and several liability. Other proceedings involving environmental
matters such as alleged discharge of oil or waste material into water or
soil are pending against the Company.
It is not possible to quantify future environmental costs because many
issues relate to actions by third parties or changes in environmental
regulation. However, based on information presently available, management
believes that the ultimate disposition of currently known matters will not
have a material effect on the financial position, liquidity, or results of
operation of the Company. As of June 30, 1997 the aggregate environmental
related accruals were $5.0 million. Environmental liabilities are paid
over an extended period and the timing of such payments cannot be
predicted with any confidence.
4. On January 7, 1997, the Company adopted the 1997 Stock Incentive Plan
("the Incentive Plan"), subject to shareholder approval, whereby awards
may be granted to certain employees and non-employee directors of the
Company in the form of restricted shares of the Company stock or options
to purchase Company stock. Awards are discretionary and are determined by
the Compensation Committee of the Board of Directors. The total amount of
restricted shares and options available for grant under the Incentive Plan
is 1.85 million shares. As of June 30, 1997, awards were granted to
certain officers of the Company totaling 1.5 million shares. The options
were granted at the Company's current market price on the date of grant
and range from $57.43 to $69.00 after adjustment for the effects of the
special dividend. The options are exerciseable in equal
installments on the first five anniversaries of the date of grant and
expire generally 10 years after date of grant.
Effective January 6, 1997, the Company also granted to Mr. Rummell,
Chairman and CEO of the Company, 67,287 restricted shares of the Company's
common stock. The restricted shares vest in equal installments on the
first five anniversaries of the date of grant. The Company has recorded
deferred compensation of $3.9 million for the unamortized portion of this
grant as of June 30, 1997. Compensation expense related to this grant
totaled approximately $.4 million in 1997.
Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting
for Stock-Based Compensation, permits entities to recognize as expense
over the vesting period the fair value of all stock-based awards on the
date of grant. Alternatively, SFAS No. 123 also allows entities to apply
the provisions of Accounting Principles Board ("APB") Opinion No. 25,
Accounting for Stock Issued to Employees, and provide pro forma net income
and pro forma earnings per share disclosures for employee stock option
grants as if the fair-value-based method defined in SFAS No. 123 had been
applied. Under APB No. 25, compensation expense would be recorded on the
date of grant only if the current market price of the underlying stock
exceeded the exercise price. The Company has elected to apply the
provisions of APB Opinion No. 25 and provide the pro forma disclosure
provisions of SFAS No. 123. The disclosures are not required for interim
reporting.
5. On January 10, 1997, the Company purchased for $5.5 million, a 38% limited
partnership interest in Deerfield Park, LLC, a limited partnership
established to acquire and develop 554 acres of land in Fulton County,
Georgia. No equity or loss has been incurred in 1997.
6. The linerboard mill at Port St. Joe was shutdown in April, 1997 due to
soft market conditions in the paper industry. The Company continues to
evaluate the impact of this shutdown on its sales related to the wood
fiber supply agreement and its transportation revenues generated from
shipments of wood to the mill. The financial impact to transportation
(ANRR) and forestry segments operations would have a significant adverse
impact on the segments' revenues, operating profit, net income and cash
flow if the mill does not honor the annual tonnage requirement of the
agreement. Forestry and transportation are considering the alternatives
available to it to mitigate this potential loss.
7
<PAGE> 8
7. On May 5, the Company announced that it has made a proposal to the Board
of Directors of Florida East Coast Industries (FECI) under which the
Company and FECI would merge and all shares of FECI stock owned by others
than the Company would be exchanged for cash at $102 per share.
There are approximately 9.1 million shares of FECI common stock
outstanding, of which approximately 4.9 million, or 54%, are owned by St.
Joe. On May 2, 1997, the closing price on the New York Stock Exchange of
FECI common stock was $88ae per share and of St. Joe was $73(0) per share.
The proposed merger would be subject to all required regulatory approvals
and approval by the shareholders of FECI, as well as other customary terms
and conditions. The proposal is also subject to negotiation of a merger
agreement containing terms and conditions mutually satisfactory to the
parties.
The Company is evaluating various financing alternatives. There can be no
assurances when, if or on what terms the Company and FECI can reach
agreement with respect to the Company's proposal.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company reported net income of $11.2 million or $.37 per share for the
second quarter of 1997 as compared to $88.0 million or $2.89 per share for the
comparative quarter of 1996. Operating results for the second quarter of 1996
included income from discontinued operations totaling $82.2 million, net of
tax. Included in 1997's second quarter net income are operating profits of
$15.9 million as compared to $22.8 million in the second quarter of 1996, of
which $13.7 million related to a land sale to the State of Florida.
Net income for the six months ended June 30, 1997 was $19.2 million or $.63 per
share as compared to $156.6 million or $5.13 per share in 1996. Results for
1996 included income from discontinued operations of $91.1 million, net of tax
and operating profit from land sales to the State of Florida totaling $97.6
million.
On May 5, the Company announced that it has made a proposal to the Board of
Directors of Florida East Coast Industries (FECI) under which the Company and
FECI would merge and all shares of FECI stock owned by others than the Company
would be exchanged for cash at $102 per share. There are approximately 9.1
million shares of FECI common stock outstanding, of which approximately 4.9
million, or 54%, are owned by St. Joe. On May 2, 1997, the closing price on the
New York Stock Exchange of FECI common stock was $88ae per share and of St. Joe
was $73(0) per share. The proposed merger would be subject to all required
regulatory approvals and approval by the shareholders of FECI, as well as other
customary terms and conditions. The proposal is also subject to negotiation of
a merger agreement containing terms and conditions mutually satisfactory to the
parties.
The Company's cash and equivalents was reduced $305 million during 1997 by the
distribution of the previously announced special dividend of $10 per share for
stockholders of record on March 21, 1997.
On February 25, 1997, the Board of Directors approved an Interim Severance
Program. The program was available to all employees (including early and
regular retirees) who elected to leave employment with the Company prior to May
2, 1997. Based on the number of employees electing to participate, the Company
incurred severance costs of approximately $2.5 million during 1997.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
TRANSPORTATION
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
($IN MILLIONS) ($IN MILLIONS)
1997 1996 % CHANGE 1997 1996 % CHANGE
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues $48.2 $47.0 2.6 $96.6 $92.4 4.5
Operating Expenses 33.2 35.2 -5.7 67.1 69.9 -4.0
Selling, General and
Administrative 7.5 4.6 63.0 11.9 9.8 21.4
Operating Profit 7.6 7.2 5.6 17.5 12.7 37.8
</TABLE>
THREE MONTHS ENDED JUNE 30
FEC contributed $46.2 million of operating revenues and Apalachicola Northern
Railroad Company (ANRR) contributed $2.0 million for the second quarter of
1997. FEC's operating revenues were up $2.5 million compared to the second
quarter of 1996 due to an increase in intermodal traffic, increase in
transportation of rock shipments and various rate increases instituted during
the quarter. ANRR's
9
<PAGE> 10
operating revenues were lower than last year due to fewer freight shipments to
the linerboard mill. Operating expenses were $2 million lower than prior year,
due to a non-recurring charge related to a 1996 legal judgment of $1.6 million
and a reduction at ANRR of costs due to layoffs as a result of the mill
shutdown. Selling, general and administrative expenses increased $2.9 million
in the second quarter of 1997 compared to the second quarter of 1996 as a
result of approximately $2.9 million of costs incurred prior to the May 5, 1997
announcement concerning the proposed merger of FECI and the Company.
SIX MONTHS ENDED JUNE 30
Total FEC transportation operating revenues year to date were $91.5 million as
compared to $86.1 million is 1996. ANRR's operating revenues were $5.1 million
in 1997 as compared to $6.3 million in 1996. Operating expenses for this
segment as a percentage of revenues were improved over last year as a result of
the FEC nonrecurring charge in 1996 as well as overall improvements in operating
expenses. Operating profit for the transportation segment overall has increased
from 13.7% to 18.1% as a result.
10
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<TABLE>
<CAPTION>
REAL ESTATE
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
($ IN MILLIONS) ($ IN MILLIONS)
1997 1996 % CHANGE 1997 1996 % CHANGE
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $28.2 $21.6 30.6 $42.8 $114.3 -62.6
Cost of Sales 21.7 5.5 294.5 33.7 12.5 169.6
Selling, General and
Administrative Expenses 1.3 .9 -44.4 2.8 1.8 55.6
Operating Profit 5.2 15.2 -65.8 6.3 100.0 -93.7
</TABLE>
THREE MONTHS ENDED JUNE 30
Real estate net sales increased $6.6 million in the second quarter of 1997
compared to the second quarter of 1996. Current year's revenues include sales
of buildings and property located primarily in North Florida by Gran Central
Corporation (GCC) totaling $15.7 million with cost of sales totaling $14.8
million and Southwood Properties (Southwood) lot sales in its Camp Creek and
Woods III developments located in west Florida totaling $3.0 million with cost
of sales totaling $1.0 million. A Southwood condemnation sale for $13.8 million
attributed to the majority of 1996's revenue. Rental revenues totaled $8.9
million in the second quarter of 1997 compared to $7.8 million in the second
quarter of 1996. This 14% increase is attributable to a comparable increase in
square footage occupied. Operating expenses related to realty revenues were
$5.9 million in 1997 for a 33.7% gross margin compared to $5.2 million for a
33.3% gross margin in 1996. Selling, general and administrative costs are up in
1997 due primarily to additional salaries and related benefits.
SIX MONTHS ENDED JUNE 30
Year to date 1997 real estate net sales were $71.5 million lower than 1996 as a
result of two condemnation sales totaling $97.8 during the first six months of
1996. Costs associated with these two sales were $ .1 million. Real property
sales totaled $25.2 million in 1997 with costs of sales of $22.1 million. Rental
revenues totaled $17.6 million in 1997 compared to $15.5 million in 1996.
Operating expenses on realty revenue were $11.5 million for a 34.7% gross margin
compared to $10.0 million in 1996 for a gross margin of 34.6%. Year to date
selling, general and administrative expenses are up in 1997 due to non-recurring
legal fees incurred in the first quarter of 1997 and additional salaries
and benefits previously discussed.
<TABLE>
<CAPTION>
FORESTRY
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
($ IN MILLIONS) ($ IN MILLIONS)
1997 1996 % CHANGE 1997 1996 & CHANGE
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $4.0 $11.6 -65.5 17.8 25.7 -30.7
Cost of Sales 2.7 10.9 -75.2 16.4 25.1 -34.7
Selling, General and
Administrative Expenses .2 -.7 -71.4 1.3 .6 116.7
Operating Profit (Loss) 1.1 1.4 -21.4 .1 -
</TABLE>
THREE MONTHS ENDED JUNE 30
As a result of the linerboard mill shutdown, sales to the mill decreased from
$6.5 million in the second quarter of 1996 to .7 million in 1997. This
reduction in sales was offset by sales to other vendors at a higher margin.
Cost of sales were lower than previous year's, as more sales of Company grown
timber with lower cut and haul costs occurred in 1997 versus 1996.
SIX MONTHS ENDED JUNE 30
Total net sales in 1997 were lower by $7.9 million compared to the first six
months of 1996, all of which is attributable to the linerboard mill shutdown.
Cost of sales continue to improve as the Company sells more of its grown timber
with lower cut and haul costs than procured wood. Selling, general and
administrative costs are .7 million higher this year than last year primarily
due to severance payments and related benefits paid to terminated employees.
11
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<TABLE>
<CAPTION>
SUGAR
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
($ IN MILLIONS) ($ IN MILLIONS)
1997 1996 % CHANGE 1997 1996 % CHANGE
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C>
Net Sales $13.7 - - $25.4 $18.7 35.8
Cost of Sales 10.5 - - 19.3 13.1 47.3
Selling, General and
Administrative Expenses 1.1 .8 37.5 2.5 2.5 -
Operating Profit (Loss) 2.2 -.8 -375.0 3.6 3.1 16.1
</TABLE>
THREE MONTHS ENDED JUNE 30
There were no sugar shipments in the second quarter of 1996 per agreement with
this segment's customer.
SIX MONTHS ENDED JUNE 30
Year to date sugar sales experienced a 39.5% volume increase (16.8 million tons)
compared to the first six months of 1996; however, sales price per ton was
$11.53 lower than last year, resulting in an overall increase of $6.7 million in
net sales. Cost of sales as a percentage of sales increased from 70.1% to 76.0%
due to the lower selling price, higher direct costs including cultivation
expenses, as well as higher indirect costs compared to 1996. Selling, general
and administrative expense levels were consistent with 1996. Included in
selling, general and administrative expense is the Everglades Agricultural
Privileges Tax of $531,000 and $652,000 for the first quarter of 1997 and 1996
respectively.
OTHER SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, not allocated to segments,
for the second quarter of 1997 total $.2 million compared to $.3 million in
1996. These costs for 1997 are net of income of $2.8 million recorded for the
change in prepaid pension cost . The gross amount of $3.0 million in selling,
general and administrative costs primarily relate to new management increasing
staffing and related new hire costs. Additionally, the Company charged to
earnings $.5 million of costs related to previous efforts to acquire 100% of
GCC's assets. It is anticipated that general and administrative expenses will
continue at this level for the remainder of this year. Year to date selling,
general and administrative expenses for 1997 totaled $ 1.4 million, which is
net of total income of $5.6 million related to the change in prepaid pension
costs.
OTHER INCOME consisting of gain on sales and other dispositions of property
increased $2.9 million in the second quarter of 1997 compared to 1996 due to
dispositions of excess equipment no longer used in operations. Interest income
decreased by .8 million reflecting the decrease in investments attributable to
payout of the special dividend .
The Company's year to date effective tax rate was 44.3% in 1997 compared to
46.3% in 1996 as a result of the 50% excise tax on prepaid pension cost totaling
$2.6 million in 1997 and $11.0 million in 1996.
FINANCIAL POSITION
As a result of the distribution of the special dividend of $10 per share paid
during the first quarter, cash decreased approximately $305 million. The
Company's current ratio still remains strong at 6.0 at June 30, 1997.
Stockholders' equity at June 30, 1997 was $30.22 per share, a decrease of $9.03
from December 31, 1996, due to total dividends paid of $308.7 million, including
the special dividend and the regular $.05 dividend in the first and second
quarter.
12
<PAGE> 13
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
A Report on Form 8-K Item 5. "Other Events" was filed on
May 9, 1997
13
<PAGE> 14
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.
St. Joe Corporation
Date: August 13, 1997 /s/ Peter S. Rummell
------------------- ----------------------------------
Peter S. Rummell
Chief Executive Officer
Date: August 13, 1997 /s/ Charles A. Ledsinger
-------------------- ----------------------------------
Charles A. Ledsinger
Chief Financial Officer
(Principal Financial Officer)
(Principal Accounting Officer)
14
<PAGE> 15
Exhibit Index
27 Financial Data Schedule (for SEC use only).
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 172,111
<SECURITIES> 28,437
<RECEIVABLES> 44,548
<ALLOWANCES> 0
<INVENTORY> 13,101
<CURRENT-ASSETS> 26,257
<PP&E> 1,168,329
<DEPRECIATION> (322,280)
<TOTAL-ASSETS> 1,549,364
<CURRENT-LIABILITIES> 47,492
<BONDS> 0
0
0
<COMMON> 13,054
<OTHER-SE> 910,947
<TOTAL-LIABILITY-AND-EQUITY> 1,549,364
<SALES> 68,518
<TOTAL-REVENUES> 182,481
<CGS> 57,908
<TOTAL-COSTS> 156,352
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (241)
<INCOME-PRETAX> 48,671
<INCOME-TAX> 21,549
<INCOME-CONTINUING> 19,224
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,224
<EPS-PRIMARY> 0.63
<EPS-DILUTED> 0.63
</TABLE>
