Stratus(US:STRS)2019-05-10 21:20Financial Data and Key Metrics Changes - Stratus reported net income attributable to common stockholders of $0.9 million or $0.10 per share in Q1 2019, compared to a net loss of $1.9 million or $0.23 per share in Q1 2018 [19] - Revenues totaled $19.7 million in Q1 2019, up from $17.8 million a year ago, primarily due to higher revenues from single-family residential property sales and new leases [20] - Adjusted EBITDA for Q1 2019 was $0.8 million compared to $1 million in Q1 2018 [21] - Consolidated debt increased to $320.9 million as of March 31, 2019, from $295.5 million at December 31, 2018 [30] Business Line Data and Key Metrics Changes - Real estate operations segment revenues increased to $3 million in Q1 2019 from $1.2 million in Q1 2018, with operating income rising to $2.8 million from a loss of $0.4 million [21] - Leasing operations segment revenues rose to $3.9 million in Q1 2019, up from $2.3 million a year ago, with operating income increasing to $2.4 million from $0.4 million [24] - Hotel segment revenues decreased to $8.4 million in Q1 2019 from $9.4 million in Q1 2018, with operating income dropping to $0.8 million from $1.5 million [26] - Entertainment segment revenues were $4.8 million in Q1 2019, down from $5.3 million in the same period last year, but operating income increased to $2.8 million from $0.7 million [28] Market Data and Key Metrics Changes - Revenue per available room in the hotel segment was $238 compared to $262 in Q1 2018, indicating increased competition in downtown Austin [27] - ACL Live hosted 64 events and sold approximately 49,000 tickets in Q1 2019, compared to 57 events and approximately 55,000 tickets in Q1 2018 [29] Company Strategy and Development Direction - The company focuses on an active development program that includes acquiring entitlements, constructing properties, and preparing them for sale or refinancing [7] - The company has projects in various stages of development, including the HEB-anchored mixed-use project in New County, Texas, and the Kingwood Place project [8][9] - The company aims to sustain momentum by stabilizing properties and preparing them for potential sale or refinancing, particularly in fast-growing markets in Texas [38] Management's Comments on Operating Environment and Future Outlook - Management noted that all aspects of the business are performing well, but the transition to Marriott has caused some disruptions [42] - The company believes that its sizable land portfolio is underappreciated and misunderstood by investors, as it does not produce cash flow like traditional real estate investments [44][46] - Management remains optimistic about the long-term outlook for the W. Austin hotel, citing population growth and increased tourism in the Austin market [27] Other Important Information - The after-tax net asset value increased to $326.1 million or $39.58 per share as of December 31, 2018, up from $314 million or $38.08 per share as of December 31, 2017 [33] - The company received $4.6 million in bond proceeds related to Travis County MUD reimbursements in Q1 2019 [17] Q&A Session Summary Question: What parts of Stratus are unappreciated and misunderstood by investors? - Management indicated that the transition to Marriott has caused some weakness, but overall performance is strong. The time to complete leases and permitting has also stretched out due to increased workload in Austin [42][43] - The sizable land portfolio is seen as underappreciated, as it does not generate cash flow like traditional real estate investments, making it challenging for investors to understand its value [44][46]