Revenue and Income - For the three months ended March 31, 2023, total revenue decreased to $16.8 million from $26.9 million for the same period in 2022, representing a decline of approximately 37.5%[174] - Operating lease income fell to $1.7 million, down from $3.1 million in the prior year, a decrease of 45.0% attributed to asset sales[174] - Interest income decreased to $1.1 million from $4.9 million, a decline of 77.4% due to a reduction in the average balance of performing loans[175] - Land development revenue was $9.6 million, down from $14.9 million, a decrease of 35.5% primarily due to reduced sales from various properties[178] - Earnings from equity method investments increased to $30.0 million for the three months ended March 31, 2023, compared to $12.6 million for the same period in 2022[185] Expenses and Losses - General and administrative expenses increased significantly to $14.1 million from $0.9 million, reflecting a rise in performance-based compensation[181] - The provision for loan losses was $1.7 million compared to $0.1 million in the prior year, primarily due to the sale of a non-performing loan[182] - The provision for loan losses was $1.7 million for the three months ended March 31, 2023, up from $0.1 million in the same period in 2022[201] - The unrealized loss on equity investment in Safe Shares amounted to $90.7 million, reflecting the fair value adjustment post Spin-Off[184] Cash Flow and Liquidity - Cash flows provided by operating activities were $(554,000) for Q1 2023, an improvement from $(10.75 million) in Q1 2022[192] - Cash flows provided by investing activities increased to $116.779 million in Q1 2023, compared to $(68.716 million) in Q1 2022[192] - The company expects to meet short-term liquidity requirements through cash flows from operations and proceeds from asset sales[189] - The company has not paid any dividends as of March 31, 2023, and does not expect to pay regular dividends in the future[187] - The company is prohibited from selling Safe Shares for nine months following the Spin-off, which may affect liquidity[190] Assets and Investments - The aggregate carrying value of the Asbury Park Waterfront investment was approximately $170.5 million as of March 31, 2023[161] - The aggregate carrying value of Magnolia Green assets was $86.0 million as of March 31, 2023, with 1,825 residential lots sold to homebuilders[164][165] - The fair value of Safe Shares was $397.2 million based on a closing price of $29.37 as of March 31, 2023[172] Debt and Interest Rate Risk - The company has $140.0 million in principal amount of floating-rate debt obligations outstanding as of March 31, 2023[209] - A 100 basis point increase in interest rates could decrease net income by $630,000[209] - The company is exposed to market risks, particularly interest rate risk, which could materially affect profitability[205] - The estimated change in net income for a decrease of 100 basis points in interest rates is an increase of $630,000[209] - The estimated change in net income for a decrease of 50 basis points in interest rates is an increase of $315,000[209] - The estimated change in net income for a decrease of 10 basis points in interest rates is an increase of $63,000[209] - The estimated change in net income for an increase of 10 basis points in interest rates is a decrease of $63,000[209] - The estimated change in net income for an increase of 50 basis points in interest rates is a decrease of $315,000[209] - The estimated change in net income for an increase of 100 basis points in interest rates is a decrease of $630,000[209] - The company had $6.8 million in principal amount of floating-rate loans receivable outstanding as of March 31, 2023[209] - The company had $70.2 million of cash and cash equivalents as of March 31, 2023[209] - The base interest rate scenario assumes a one-month LIBOR rate of 4.86% and a three-month SOFR rate of 4.91%[208]
Star (STHO) - 2023 Q1 - Quarterly Report