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Jax Daily Record Monday, Nov. 6, 201706:50 AM EST

Rayonier officially moves headquarters to Nassau County

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Timber company address now in Wildlight community.
by: Mark Basch Contributing Writer

Nassau County now has a public company it can call its own.

When Rayonier Inc. filed its quarterly financial report last week with the Securities and Exchange Commission, it listed its address as 1 Rayonier Way in Yulee.

That’s the new 55,000-square-foot building in Rayonier’s Wildlight community under development in Nassau County.

Rayonier moved its headquarters into that building during the summer from its office in Downtown Jacksonville in the One Enterprise Center building. Rayonier’s previous SEC filing listed its address there at 225 Water St.

As it reported earnings, Rayonier said it sold its first residential lot in Wildlight during the third quarter. A new elementary school opened there in August.

Rayonier reported third-quarter earnings of 19 cents a share, down from 32 cents in the third quarter of 2016. Last year’s results were helped by a large real estate sale.

The timber and real estate company said its operations were impacted by hurricanes Harvey and Irma as flooding in Florida, Texas and Louisiana impacted its ability to harvest timber.

However, the company was able to meet its target harvest levels by shifting to dry areas, said Doug Long, senior vice president of U.S. operations, in Rayonier’s conference call with analysts.

Long said “we do not anticipate any material impairment charges resulting from these storms.”

Rayonier AM feels Irma impact

Rayonier got off lucky as a number of Jacksonville companies reporting third-quarter earnings last week recorded financial losses from the hurricanes, including the company that split up with Rayonier Inc. in 2014.

Rayonier Advanced Materials Inc.’s earnings took a hit from Irma, and it shows why the company needs a major acquisition that should be completed in the fourth quarter, CEO Paul Boynton said.

Rayonier AM announced in May it would acquire Montreal-based Tembec Inc. in a deal that will more than double its size and diversify its geographic reach and product mix in the cellulose specialties product market.

“The challenges of the current quarter highlight the need for the company to grow and diversify its business, so that one event or one market won’t have such a large impact on our overall financial performance,” Boynton said in the company’s quarterly conference call Thursday.

The company shut down its two manufacturing facilities as Irma approached, which Rayonier AM said reduced third-quarter earnings by $3 million and will likely cut $4 million from the fourth quarter.

“We were able to start up effectively but the lost production had an adverse impact on the quarter and will continue to pressure the fourth quarter,” Boynton said.

Rayonier AM reported third-quarter adjusted earnings of $10 million, or 18 cents a share, down from $22 million, or 44 cents a share, last year.

In addition to the Irma impact, Rayonier AM announced two weeks ago that an operational issue at one of its customers will reduce fourth-quarter sales by $15 million to $30 million.

Rayonier AM is forecasting full-year earnings of $25 million, down from its previous forecast of $32 million to $39 million.

Investors already were aware of the bad news. Rayonier AM’s stock rose $1.17 to $15.40 Thursday after the earnings report.

Advanced Disposal up despite Irma

Advanced Disposal Services Inc. was impacted by Hurricane Irma, but its adjusted earnings still rose almost 30 percent to $13.9 million, or 16 cents a share.

During the Ponte Vedra-based waste management company’s conference call, CEO Richard Burke said storm-related cleanup is continuing. The cost of the cleanup reduced earnings before interest, taxes, depreciation and amortization (EBITDA) by $1 million in the third quarter and is expected to reduce it by $2 million for the full year.

Besides dealing with storm costs, Advanced Disposal is facing “some other near-term cost pressures such as health care that we are structurally addressing in 2018, but are currently headwinds,” Burke said.

Because of those cost pressures, Advanced Disposal reduced its EBITDA forecast for the full year from a range of $423 million to $433 million to a range of $416 million to $419 million.

Advanced Disposal’s stock fell $1.93 to $22.60 Thursday after the earnings report.

Regency sees good signs for retail

Shopping center developer Regency Centers Corp. said its properties had minimal damage after the hurricanes, but the company did incur repair and cleanup charges of $1.9 million, or 1 cent a share, in the third quarter.

Regency’s core funds from operations in the quarter were 95 cents a share, up from 81 cents last year.

Funds from operations basically are earnings excluding noncash charges such as depreciation and amortization expenses, and are a key indicator of a real estate investment trust’s performance.

Most of Regency’s properties are neighborhood shopping centers anchored by supermarkets, and analysts have been speculating about the future of those properties in an online shopping world. During Regency’s conference call, CEO Hap Stein said he remains optimistic.

“Following the close of Amazon’s acquisition of Whole Foods, Whole Foods is re-engaged and actively expanding again. We believe this is a validation by the world’s pre-eminent online platform that bricks-and-mortar is a critical component to a retailer’s success,” he said.

Hurricanes hurt Graham TV

You’ve undoubtedly noticed how local television stations drop everything when a hurricane affects the area. But it’s not good business.

Graham Holdings Co., owner of Jacksonville stations WJXT TV-4 and WCWJ TV-17, said its stations in Florida and Texas ran “extensive news programming coverage of hurricanes Harvey and Irma,” reducing third-quarter revenue by $2.1 million and increasing station expenses by about $600,000.

In addition to the Jacksonville stations, Graham owns stations in Orlando, Houston and San Antonio, as well as Detroit and Roanoke, Virginia.

Total revenue from its seven stations fell by 10 percent in the third quarter to $101.3 million. Along with the hurricane losses, revenue was  affected by decreased political ads and by summer Olympics-related ads at its NBC network stations, which lifted revenue in 2016.

Irma helps Publix

You undoubtedly also noticed the long lines at the supermarket before Hurricane Irma. Storms are good for business there.

Publix Super Markets Inc. reported total sales rose 6.2 percent to $8.5 billion and comparable-store sales (sales at stores open for more than one year) rose 4.3 percent in the third quarter, helped by sales before Irma.

The company estimates Irma increased sales by $250 million.

“We have faced many hurricanes in our past, but none with the size and impact of Hurricane Irma,” CEO Todd Jones said in a news release.

Lakeland-based Publix operates nearly 800 stores in Florida, which was hit hard by Irma.

Third-quarter earnings rose 8 cents a share to 63 cents. Publix said profits from the additional Irma sales more than offset inventory losses from power outages and other expenses.

Based on the latest appraisal, Publix said its stock price increased from $36.05 on Aug. 1 to $36.85 on Nov. 1.

The stock is not publicly traded and is made available for sale only to employees, with the price determined by appraisals.

Black Knight moving independently

Now that Black Knight Inc. is a fully independent public company, the mortgage technology firm is focusing on drawing investor interest.

Title insurer Fidelity National Financial Inc. owned a majority stake in Black Knight, but it distributed its Black Knight shares to Fidelity stockholders at the end of September.

After the spinoff, Black Knight officials went on the road to meet with investors, CEO Tom Sanzone said during the company’s quarterly conference call.

“With 83 million shares moving into the hands of FNF shareholders, it was critical for us to reinforce the attributes that we believe make Black Knight such a strong strategic and long-term investment,” he said.

Those attributes include “our unmatched end-to-end capabilities, blue chip client base, comprehensive public and proprietary data sets, massive addressable market and powerful long term reoccurring financial model,” he said.

Black Knight provides technology covering all aspects of the mortgage process and is the dominant company in its field.

The company last week announced an agreement with Ocwen Financial Corp. that means Black Knight now serves 14 of the 15 largest mortgage loan servicing companies, Sanzone said.

Black Knight reported adjusted third-quarter earnings of 36 cents a share, 7 cents higher than last year.

FIS stock dips on revenue miss

Fidelity National Information Services Inc., or FIS, reported adjusted third-quarter earnings of $1.18 a share, 18 cents higher than last year and 12 cents higher than the average forecast of analysts, according to Yahoo Finance.

The banking technology company, which also was spun off from Fidelity National Financial more than a decade ago, raised its earnings forecast for the full year.

FIS expects adjusted earnings of $4.38 to $4.43 a share, 15 percent to 16 percent higher than last year. It had previously forecast a range of $4.25 to $4.39.

While earnings were good, adjusted revenue of $2.2 billion was slightly below forecasts. That sent FIS’ stock down $3.31 to $92.76 Tuesday after the earnings report.

“FIS kept 2017 revenue growth guidance intact, which implies an encouragingly high fourth-quarter growth rate, but also anxiety over achievability,” J.P. Morgan analyst Tien-tsin Huang said in a research note.

However, Robert W. Baird analyst David Koning is more optimistic about revenue trends.

“We like this as a 2018 story, as we expect revenue growth to accelerate nicely in the fourth quarter,” Koning said in his report.

FRP still waiting

It looks like FRP Holdings Inc. won’t make a decision on converting to a real estate investment trust, or REIT, this year.

As the Jacksonville-based commercial real estate developer held its third quarter conference call last week, CEO John Baker reiterated that the company won’t make a decision until it gets “clarity” on new federal income tax laws.

“Presumably that will be in 2018 but that’s not for us to say,” Baker said.

FRP reported a huge increase in third quarter earnings to $2.52 a share, compared with 20 cents a year ago, because of a tax gain.

The gain was related to a remeasurement of its investment in a project in Washington, D.C.
 

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