Stratus(STRS) - 2024 Q3 - Quarterly Report

Financial Performance - Revenues totaled $8.9 million in Q3 2024 and$43.9 million for the first nine months of 2024, compared to $3.7 million and$13.0 million in the same periods of 2023, representing a 140% increase in Q3 and a 238% increase year-to-date [88]. - Net income attributable to common stockholders was $2.5 million, or$0.30 per diluted share, for the first nine months of 2024, compared to a net loss of $13.9 million, or$1.74 per diluted share, in the same period of 2023 [89]. - The Real Estate Operations segment reported revenues of $3,971,000 for Q3 2024, compared to$2,551,000 in Q3 2023, reflecting a significant increase [116]. - The company experienced an operating loss of $1,519,000 for Q3 2024, an improvement from a loss of$3,329,000 in Q3 2023 [114]. - Developed property sales increased significantly, with revenues of $15.2 million in Q3 2024 compared to$2.5 million in Q3 2023, reflecting a 520% increase [119]. - Rental revenue for the first nine months of 2024 was $14.2 million, compared to$10.5 million in the same period of 2023, marking a 35% increase [123]. - Interest expense for the first nine months of 2024 totaled $11.9 million, up from$8.7 million in the same period of 2023, reflecting higher interest rates and increased debt balances [127]. - Cash used in operating activities improved to $2.4 million in the first nine months of 2024, compared to$39.3 million in the same period of 2023 [133]. Revenue Drivers - The increase in revenues for the first nine months of 2024 was primarily due to the sale of approximately 47 acres of undeveloped land at Magnolia Place for $14.5 million and four Amarra Villas homes for a total of$15.2 million [88]. - The company completed the sale of five Amarra Villas homes for a total of $17.7 million during 2023 and the first nine months of 2024 [82]. - The average sales price for Amarra Villas homes rose approximately 52$2.5 million in the first nine months of 2023 to $3.8 million in the same period of 2024 [119]. - The company recorded a pre-tax gain of$1.6 million from the sale of Magnolia Place – Retail, which sold for $8.9 million [125]. Development Projects - The Saint June multi-family project achieved approximately 97$2.3 million letter of credit backing infrastructure construction [99]. Financing and Debt Management - A new $5.0 million share repurchase program was approved by the Board in November 2023, following the completion of a$10.0 million share repurchase program in October 2023 [76]. - As of September 30, 2024, consolidated cash totaled $19.6 million, with$39.6 million available under the revolving credit facility [81]. - The company anticipates making future operating loans to the limited partnership for The Annie B totaling up to $2.6 million over the next 12 months [80]. - The company paid off the$8.8 million Magnolia Place construction loan and made principal payments of $14.4 million on the Amarra Villas credit facility during the first nine months of 2024 [149]. - Total debt as of September 30, 2024, was$182.9 million, an increase from $177.4 million at the end of 2023 [142]. - The company expects to refinance the Kingwood Place construction loan before its December 6, 2024 maturity date, anticipating tighter spreads and potential additional proceeds [150]. - The company plans to extend or refinance outstanding debt maturing in the next 12 months, including its revolving credit facility [161]. Market Conditions and Outlook - Market conditions have been challenging due to inflation and higher borrowing costs, impacting project profitability and timelines [110]. - The residential market in Austin remains attractive despite recent moderation in prices and demand, with expectations for improvement over the next 12 months [112]. - The company cautions that forward-looking statements are not guarantees of future performance and actual results may differ materially [170]. Compliance and Risk Factors - As of September 30, 2024, the company was in compliance with all financial covenants in its debt agreements [151]. - There have been no material changes to the company's risk factors previously disclosed in its 2023 Form 10-K [177]. - The company does not expect recent accounting standards updates to have a material effect on its consolidated financial statements [164][166].