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Jax Daily Record Thursday, Aug. 8, 201905:10 AM EST

‘Seamless’ transition expected at Regency Centers

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Company President Lisa Palmer will succeed the retiring Hap Stein in January.
by: Mark Basch Contributing Writer

After he ran the company for more than a quarter of a century, it might have been unnerving to some stockholders to hear Hap Stein is stepping aside as CEO of Regency Centers Corp.

But Wall Street already knows his successor, Lisa Palmer, quite well and isn’t expecting anything to change at the Jacksonville-based shopping center developer.

“We believe the changes in leadership were largely anticipated by investors (this leadership team has a proven track record and is highly regarded within the investment community) and we anticipate a seamless transition,” Raymond James analyst Collin Mings said in a research note.

Regency announced last Thursday that Stein, 66, will retire to the role of executive chairman Jan. 1.

Palmer, 51, has been with Regency since 1996 and became chief financial officer in 2013 and president in 2016. She will become president and CEO on Jan. 1.

“Over the last several years, Lisa and I have been partners in the direction of Regency, making decisions together every step of the way,” Stein said during Regency’s quarterly conference call Friday.

“This succession is the result of a well-considered plan that Regency has been crafting for the last several years,” he said.

Analysts were in agreement about the succession plan.

“Our take is that the transitions make sense and should be well-received,” J.P. Morgan analyst Michael Mueller said in a research note.

“We believe this thoughtful management transition solidifies Regency’s platform for continued growth,” Deutsche Bank analyst Derek Johnston said in his note.

Stein’s parents founded Regency’s predecessor company in 1963 and it first gained notoriety as the developer of Regency Square Mall in 1967. It later sold the property.

Stein became CEO when the company went public in 1993.

Regency now develops and operates mainly neighborhood malls anchored by supermarkets. The company operated 410 retail properties as of June 30.

As Regency announced the management change, it also reported core operating earnings of 91 cents a share for the second quarter, 2 cents higher than the second quarter of 2018.

The company considers those core earnings, which include nonrecurring and noncash items, as the best measure of its performance.

Regency’s same property net operating income (results at properties owned for more than a year) grew by 2.1% in the first half of this year.

“The year is playing out as expected with same-store NOI growth below trend, but Regency is setting the stage for longer-term growth via external growth initiatives including: asset recycling, redevelopment and development,” RBC Capital Markets analyst Wes Golladay said in a research note.

Rayonier AM selling mill for $175 million

Rayonier Advanced Materials Inc. last week agreed to sell a pulp mill in Matane, Quebec, to South Africa-based Sappi Ltd. for $175 million.

Jacksonville-based Rayonier AM acquired the mill as part of its 2017 acquisition of Montreal-based Tembec Inc.

The company has been looking to sell former Tembec properties that are not part of Rayonier AM’s core business of cellulose specialties products.

“As part of our portfolio evaluation, the sale of the Matane mill allows us to divest a non-core asset while providing our stockholders with fair value,” CEO Paul Boynton said in a news release.

Advanced Disposal earnings down

Advanced Disposal Services Inc. last week reported adjusted second-quarter earnings of 10 cents a share, down from 19 cents the previous year.

The Ponte Vedra-based waste services company said revenue rose 5.3% to $419.1 million but expenses also rose. 

In a news release, CEO Richard Burke said the company “experienced some headwinds year-to-date largely due to recycling, interest costs, and leachate (liquid in landfills) from wet operating conditions.”

Larger competitor Waste Management Inc. agreed in April to buy Advanced Disposal for $4.9 billion. Because of the pending deal, Advanced Disposal no longer is holding conference calls with analysts to discuss earnings.

Stifel analyst Michael Hoffman downgraded Advanced Disposal from “buy” to “hold” after last week’s report.

“With the shareholder vote in and the deal approved, the likelihood of a third-party bid is virtually eliminated,” Hoffman said in his research note.

“The second-quarter results validate the overall trend of strong solid waste fundamentals. Advanced Disposal like all the peers suffered profit pressure from lower recycled commodity prices in addition to incremental cost of leachate processing,” he said.

Advanced Disposal shareholders approved the buyout at a special meeting in June, but the deal is not expected to close until early 2020 because of antitrust reviews of the merger.

Earnings at Patriot Transportation fall

Patriot Transportation Holding Inc. last week reported earnings of 12 cents a share for the third quarter ended June 30, down from 33 cents the previous year.

Revenue fell 6.4% to $27.5 million.

The Jacksonville-based trucking company said revenue fell because of a decrease in miles driven as Patriot and other companies in the industry deal with driver shortages.

“We have continually been running with about 30 less average drivers this year versus last year,” Patriot said in a news release.

Chemours buys Southern Ionics Minerals

The Chemours Co., a publicly traded global chemicals company, last week acquired Jacksonville-based Southern Ionics Minerals LLC for $25 million.

SIM mines and processes titanium and zirconium mineral sands, with plants in Georgia and administrative offices in Jacksonville. The company was a subsidiary of Mississippi-based Southern Ionics Inc.

Wilmington, Delaware-based Chemours said SIM’s assets complement its operations in Jesup, Georgia.

St. Joe 2nd-quarter earnings drop

The St. Joe Co. last week reported second-quarter earnings of 17 cents a share, down from 41 cents in the second quarter of 2018.

However, last year’s earnings were inflated by impact fees related to the company’s 2014 sale of the RiverTown community in northern St. Johns County.

Excluding those fees last year, the real estate development company said revenue rose 72% to $23.1 million in this year’s second quarter.

RiverTown was the last remaining Northeast Florida project for St. Joe, which was formerly headquartered in Jacksonville. The company is now based in Watersound in the Florida Panhandle.

Cannabis firm hires Candace Gingrich

An Illinois-based legal cannabis company called Revolution Enterprises said last week it is expanding into Florida with a Jacksonville-based division called Revolution Florida, and that Candace Gingrich was appointed vice president and head of business development for the Florida operations.

Gingrich, the half-sister of former Republican Speaker of the House Newt Gingrich, is a well-known advocate for LGBTQ rights. She will serve as an ambassador to the LGBTQ community for Revolution.

Her role in Revolution Florida includes marketing the company and engaging with policymakers and regulators.

Dredging company cites progress

As Great Lakes Dredge & Dock Corp. reported second-quarter results last week, CEO Lasse Petterson said in a news release “we experienced better than expected production on the Jacksonville deepening project,” but gave no other details.

Illinois-based Great Lakes was awarded a $113 million base contract last September to perform a phase of the dredging project that is intended to deepen a 13-mile stretch of the St. Johns River from 40 to 47 feet.

Great Lakes expects to win an additional $97 million contract from the U.S. Army Corps of Engineers and to complete its work in mid-2021. The entire deepening project is not scheduled for completion until at least 2024.

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