Florida

(State or other jurisdiction of incorporation)

001-11350

(Commission File Number)

59-0483700

(IRS Employer Identification No.)

1530 Cornerstone Boulevard, Suite 100

Daytona Beach, Florida

(Address of principal executive offices)

32117

(Zip Code)

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

Not Applicable

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

Company Name

Date: July 19, 2017

By:

/s/ Mark E. Patten

Mark E. Patten,

Senior Vice President and Chief Financial Officer

FOR

IMMEDIATE

RELEASE

CONSOLIDATED-TOMOKA LAND CO. REPORTS SECOND

QUARTER 2017 EARNINGS OF $0.67 PER SHARE AND

INCREASES EARNINGS GUIDANCE FOR FULL YEAR 2017

·

Net income was $0.67 per basic share, an increase of $0.39 per share, or 139.3%;

·

Operating income was approximately $8.0 million, an increase of approximately $3.3 million, or approximately 69.9%; and

·

Revenues from our Operating Segments were as follows:

Increase (Decrease)

Operating Segment

Revenue for the Quarter

($000’s)

vs Same Period in 2016

($000’s)

vs Same Period in 2016 (%)

Income Properties

$          7,565

$                 1,532

Interest Income from Commercial Loan Investments

                 (82)

-12.9%

Real Estate Operations

Golf Operations

         1,384

         (29)

-2.0%

Agriculture & Other Income

              79

315.8%

Total Revenues

$        22,838

$        9,964

·

Net income was $2.95 per basic share, an increase of $2.43 per share, or 467.3%;

·

Operating income was approximately $30.9 million, an increase of approximately $19.8 million, or approximately 177.6%; and

·

Revenues from our Operating Segments were as follows:

Increase (Decrease)

Operating Segment

Revenue for the Six Months

($000’s)

vs Same Period in 2016

($000’s)

vs Same Period in 2016 (%)

Income Properties

$          14,638

$                 2,176

Interest Income from Commercial Loan Investments

                 (426)

-28.1%

Real Estate Operations

Golf Operations

         2,858

         (19)

-0.7%

Agriculture & Other Income

              233

513.2%

Total Revenues

$        61,551

$        30,323

Increase (Decrease)

Real Estate Operations Segment

Revenue for the Quarter

($000’s)

vs Same Period in 2016

($000’s)

Land Sales Revenue

$        10,858

$             10,858

Revenue from Reimbursement of Infrastructure Costs

Impact Fees/Mitigation Credit Sales

Percentage of Completion Revenue (Tomoka Town Center)

-

Subsurface Revenue

Total Related to Real Estate Operations

$        13,257

$        8,483

Increase (Decrease)

Income Property Operations Segment

Revenue for the Quarter

($000’s)

vs Same Period in 2016

($000’s)

Q4 2016 & YTD 2017 Acquisitions

$            1,335

$             1,335

Revenue from the Grove at Winter Park

                133

                 107

Revenue from Remaining Portfolio

             5,547

                 96

Accretion of Above Market/Below Market Intangibles

                550

                (6)

Total Related to Income Property Operations

$            7,565

$             1,532

Increase (Decrease)

Real Estate Operations Segment

Revenue for the Six Months

($000’s)

vs Same Period in 2016

($000’s)

Land Sales Revenue

$        39,564

$             37,929

Revenue from Reimbursement of Infrastructure Costs

Impact Fees/Mitigation Credit Sales

Percentage of Completion Revenue (Tomoka Town Center)

-

Subsurface Revenue

Total Related to Real Estate Operations

$        42,732

$        28,396

Increase (Decrease)

Income Property Operations Segment

Revenue for the Six Months

($000’s)

vs Same Period in 2016

($000’s)

Q4 2016 & YTD 2017 Acquisitions

$                   2,330

$             2,330

Revenue from the Grove at Winter Park

                       137

                 83

Accretion of Above Market/Below Market Intangibles

                   1,081

                (82)

Revenue from Remaining Portfolio

                 11,090

              (155)

Total Related to Income Property Operations

$                14,638

$             2,176

Increase (Decrease)

For the Quarter Ended June 30, 2017

vs Same Period in 2016

vs Same Period in 2016 (%)

Net Income ($000’s)

$            3,679

$                 2,108

Basic Net Income Per Share

$              0.67

$                   0.39

·

The approximately $10.0 million increase in revenues as described above;

·

An increase in direct cost of revenues of approximately $5.0 million primarily related to the increase in the direct cost of revenues for the real estate operations of approximately $4.7 million, which primarily reflects the increase of approximately $3.7 million in cost basis related to the increased land sales during the quarter;

·

The sale of mitigation credits to Minto Communities, LLC during the second quarter of 2017 for approximately $1.1 million resulting in a gain of approximately $932,000, or $0.10 per share, after tax;

·

An increase in general and administrative expenses of approximately $828,000 primarily related to the legal and other costs related to our contested director election at our 2017 annual shareholder meeting;

·

An increase in depreciation and amortization of approximately $1.4 million resulting from the growth in our income property portfolio; and

·

Income of approximately $1.4 million recognized in the second quarter of 2016 in connection with the Company’s disposition of four single-tenant income properties offset by the recognition of approximately $2.0 million in impairment charges in the second quarter of 2016.

Increase (Decrease)

For the Six Months Ended June 30, 2017

vs Same Period in 2016

vs Same Period in 2016 (%)

Net Income ($000’s)

 $        16,425 (1)

$             13,430

Basic Net Income Per Share

$          2.95

$                 2.43

⁽¹⁾

Includes $0.24 in non-cash earnings for the elimination of the accrued liability associated with the straight-line accounting for the land lease which was terminated as part of the acquisition of the LPGA International golf course land. This earnings impact was not included in the Company’s original 2017 guidance for earnings per share.

·

The approximately $30.3 million increase in revenues as described above;

·

An increase in direct cost of revenues of approximately $12.2 million primarily related to the increase in the direct cost of revenues for the real estate operations of approximately $11.6 million, which primarily reflects an increase of approximately $9.5 million in cost basis related to the increased land sales during the quarter;

·

The sale of mitigation credits to Minto Communities, LLC during the second quarter of 2017 for approximately $1.1 million resulting in a gain of approximately $932,000, or $0.10 per share, after tax;

·

A decrease in general and administrative expenses of approximately $749,000 primarily related to a reduction in stock compensation costs of approximately $1.7 million offset by an increase of approximately $1.1 million in the legal and other costs related to our contested director election at our 2017 annual shareholder meeting in excess of the legal costs we incurred in 2016 related to certain other shareholder matters;

·

An increase in depreciation and amortization of approximately $2.1 million resulting from the growth in our income property portfolio;

·

Income of approximately $2.2 million related to the transaction to acquire the land underlying our golf operations; and

·

Income of approximately $1.4 million recognized in 2016 in connection with the Company’s disposition of four single-tenant income properties offset by the recognition of approximately $2.2 million in impairment charges during the six months ended June 30, 2016.

FY 2017

Original

Guidance

FY 2017

Updated Guidance

2017 Actual

Reported Earnings Per Share (Basic)

$2.25-$2.45

$2.95-$3.10(1)

$2.95(1)

Acquisition of Income-Producing Assets

$50mm - $70mm

No Change

Target Investment Yields (Initial Yield – Unlevered)

6% - 8%

No Change

Land Transactions (Sales Value)

$30mm - $50mm

No Change

$39.6mm

Leverage Target (as % of Total Enterprise Value)

<40%

No Change

⁽¹⁾

Includes $0.24 in non-cash earnings for the elimination of the accrued liability associated with the straight-line accounting for the land lease which was terminated as part of the acquisition of the LPGA International golf course land. This earnings impact was not included in the Company’s original 2017 guidance for earnings per share.

(Unaudited)

June 30,
2017

December 31,
2016

ASSETS

Property, Plant, and Equipment:

Income Properties, Land, Buildings, and Improvements

$

316,424,434

$

274,334,139

Golf Buildings, Improvements, and Equipment

   6,102,694

  3,528,194

Other Furnishings and Equipment

1,083,939

   1,032,911

Construction in Progress

   4,441,858

   5,267,676

Total Property, Plant, and Equipment

328,052,925

284,162,920

Less, Accumulated Depreciation and Amortization

Property, Plant, and Equipment—Net

307,800,046

267,610,843

Land and Development Costs

40,213,760

 51,955,278

Intangible Lease Assets—Net

 37,146,580

34,725,822

Impact Fee and Mitigation Credits

  1,515,906

   2,322,906

Commercial Loan Investments

23,960,467

 23,960,467

Cash and Cash Equivalents

   7,153,369

  7,779,562

Restricted Cash

  4,727,381

  9,855,469

Refundable Income Taxes

   1,199,559

      943,991

Other Assets

   8,324,420

   9,469,088

Total Assets

$

432,041,488

$

408,623,426

LIABILITIES AND SHAREHOLDERS’ EQUITY

Liabilities:

Accounts Payable

$

   1,359,060

$

   1,518,105

Accrued and Other Liabilities

   7,735,648

   8,667,897

Deferred Revenue

   1,719,866

   1,991,666

Intangible Lease Liabilities - Net

 30,703,143

 30,518,051

Accrued Stock-Based Compensation

        45,046

        42,092

Deferred Income Taxes—Net

 62,416,899

 51,364,572

Long-Term Debt

168,709,921

166,245,201

Total Liabilities

272,689,583

260,347,584

Commitments and Contingencies

Shareholders’ Equity:

Common Stock – 25,000,000 shares authorized; $1 par value, 6,038,358 shares issued and 5,622,934 shares outstanding at June 30, 2017; 6,021,564 shares issued and 5,710,238 shares outstanding at December 31, 2016

          5,931,468

          5,914,560

Treasury Stock – 415,424 shares at June 30, 2017; 311,326 shares at December 31,

 2016

      (20,811,266)

      (15,298,306)

Additional Paid-In Capital

 21,114,253

 20,511,388

Retained Earnings

152,871,541

136,892,311

Accumulated Other Comprehensive Income

      245,909

      255,889

Total Shareholders’ Equity

159,351,905

148,275,842

Total Liabilities and Shareholders’ Equity

$

432,041,488

$

408,623,426

Three Months Ended

Six Months Ended

June 30,

June 30,

June 30,

June 30,

     2017

     2016

     2017

     2016

Revenues

Income Properties

$

   7,565,007

$

    6,033,082

$

 14,638,247

$

 12,462,323

Interest Income from Commercial Loan Investments

      553,159

      635,050

   1,089,648

   1,516,295

Real Estate Operations

 13,257,355

   4,774,620

 42,731,815

 14,335,518

Golf Operations

   1,383,513

   1,412,196

   2,858,457

   2,876,555

Agriculture and Other Income

        78,749

        18,990

      232,900

        37,682

Total Revenues

 22,837,783

 12,873,938

 61,551,067

 31,228,373

Direct Cost of Revenues

Income Properties

  (1,629,515)

  (1,204,040)

  (3,041,228)

  (2,380,747)

Real Estate Operations

  (5,792,529)

  (1,124,641)

(14,949,378)

  (3,381,682)

Golf Operations

  (1,401,919)

 (1,447,176)

  (2,900,597)

(2,851,764)

Agriculture and Other Income

       (30,536)

       (52,654)

       (70,973)

     (100,705)

Total Direct Cost of Revenues

  (8,854,499)

  (3,828,511)

(20,962,176)

  (8,714,898)

General and Administrative Expenses

  (2,727,187)

  (1,899,126)

  (5,947,334)

  (6,696,583)

Impairment Charges

               —

  (1,970,822)

               —

  (2,180,730)

Depreciation and Amortization

  (3,215,690)

  (1,805,559)

  (5,978,265)

  (3,872,926)

Gain on Disposition of Assets

               —

   1,362,948

               —

   1,362,948

 Land Lease Termination

               —

               —

   2,226,526

               —

Total Operating Expenses

(14,797,376)

  (8,141,070)

(30,661,249)

(20,102,189)

Operating Income

   8,040,407

   4,732,868

 30,889,818

 11,126,184

Investment Income (Loss)

          8,524

          2,691

        17,707

     (563,693)

Interest Expense

  (2,144,176)

  (2,154,437)

  (4,206,067)

  (4,246,203)

Income Before Income Tax Expense

   5,904,755

   2,581,122

 26,701,458

    6,316,288

Income Tax Expense

  (2,225,847)

  (1,000,480)

(10,276,158)

  (3,343,081)

Net Income

   3,678,908

   1,580,642

 16,425,300

   2,973,207

Less: Net Loss (Income) Attributable to Noncontrolling

  Interest in Consolidated VIE

               —

       (10,199)

               —

         21,954

Net Income Attributable to Consolidated-Tomoka

  Land Co.

$

       3,678,908

$

       1,570,443

$

     16,425,300

$

       2,995,161

Per Share Information:

Basic

Net Income Attributable to Consolidated-Tomoka Land Co.

$

             0.67

$

             0.28

$

             2.95

$

             0.52

Diluted

Net Income Attributable to Consolidated-Tomoka Land Co.

$

            0.67

$

            0.28

$

            2.94

$

             0.52

Dividends Declared and Paid

$

            0.04

$

            0.04

$

             0.08

$

             0.04