BLUEGREEN CORP (BXG) SEC Filing 10-K Annual report for the fiscal year ending Monday, December 31, 2012

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CONTACT: -OR- INVESTOR RELATIONS:
Bluegreen Corporation   The Equity Group Inc.
Tony Puleo   Devin Sullivan
Chief Financial Officer   Senior Vice President
(561) 912-8270   (212) 836-9608
tony.puleo@bluegreencorp.com   dsullivan@equityny.com

 

FOR IMMEDIATE RELEASE

 

BLUEGREEN CORPORATION REPORTS 2012 SECOND QUARTER FINANCIAL RESULTS

 

Q2 2012 Overview

 

Bluegreen Resorts (“Resorts”) system-wide sales of vacation ownership interests (“VOIs”) increased 21.6% to $96.2 million from $79.1 million in Q2 2011.
   
Sales of VOIs made on behalf of Resorts’ fee-based services clients, which are included in system-wide sales above, rose 46.2% to $39.4 million from $27.0 million in Q2 2011.
   
Income from continuing operations attributable to Bluegreen shareholders (defined as income from continuing operations after tax less net income attributable to non-controlling interest) rose 51.3% to $14.7 million, or $0.46 per diluted share, from $9.7 million, or $0.30 per diluted share, in Q2 2011.
   
Net income rose to $13.3 million, or $0.42 per diluted share, from a net loss of $26.7 million, or $0.83 per diluted share, in Q2 2011. Q2 2011 included a loss from discontinued operations of $36.4 million, or $1.13 per diluted share, related to the Bluegreen Communities division, which was sold on May 4, 2012.
   
Unrestricted cash and cash equivalents at June 30, 2012 of $65.5 million.

 

Boca Raton, Fla. – August 7, 2012 – Bluegreen Corporation (NYSE: BXG), a leading timeshare sales, marketing and resort management company, today announced financial results for the quarter ended June 30, 2012.

 

John M. Maloney Jr., President and Chief Executive Officer of Bluegreen, commented, “Our strong performance continued in the 2012 second quarter, with growth in our traditional VOI business as well as our fee-based services business. We produced notable improvements in areas such as tours, transactions, and conversion rates, which we attribute to the quality and value of our offerings, a disciplined approach to marketing, and the commitment of our people. In addition, we continued to advance towards our goal of making our fee-based services business an increasing portion of our total business. Fee-based services represented approximately 41% and 35% of total system-wide VOI sales for the three and six months ended June 30, 2012, respectively, up from approximately 34% and 32%, respectively, in the same periods last year. Through the first half of 2012, we generated free cash flow of $89.8 million (including $27.8 million of proceeds from the sale of Bluegreen Communities) and reduced outstanding debt by approximately $95.0 million.”

 

Additional Q2 2012 operating highlights included:

 

In connection with its fee-based services business, Resorts sold $39.4 million of third-party VOIs in Q2 2012, generating sales and marketing commissions of approximately $25.7 million. This compares to sales of $27.0 million of third-party VOIs in Q2 2011, which generated sales and marketing commissions of $18.3 million.
   
Total revenues from fee-based services rose 25.2% to $44.6 million in Q2 2012 from $35.6 million in Q2 2011. Fee-based services contributed an estimated $15.6 million to Resorts operating profit in Q2 2012, compared to an estimated $12.7 million in Q2 2011.  As of June 30, 2012, Bluegreen managed 46 timeshare resort properties and hotels compared to 45 as of June 30, 2011.

 

 
 

As previously disclosed, on November 11, 2011, Bluegreen entered into a definitive merger agreement with BFC Financial Corporation (“BFC”) pursuant to which, upon consummation of the merger, Bluegreen will become a wholly-owned subsidiary of BFC. The merger was approved by both Bluegreen and BFC’s shareholders on June 19, 2012. Under the terms of the merger agreement, holders of Bluegreen’s common stock (other than BFC) will be entitled to receive, in exchange for each share of Bluegreen common stock that they hold at the effective time of the merger, eight shares of BFC’s Class A Common Stock (as adjusted in connection with a reverse stock split expected to be effected by BFC immediately prior to the consummation of the merger). BFC and Bluegreen are working in good faith to satisfy the conditions required to consummate the merger prior to September 30, 2012. The consummation of the merger is subject to certain conditions, including the listing of BFC's Class A Common Stock on a national securities exchange. The transaction will close when all conditions in the merger agreement have been met. There is no assurance that the conditions for the consummation of the merger will be met or that the merger will be consummated.

 

BLUEGREEN RESORTS

 

Supplemental Financial Data and Reconciliation of System-Wide Sales of VOIs to GAAP Gross Sales of VOIs

Three and Six Months Ended June 30, 2012 and 2011

(In 000’s, except percentages) (Unaudited)

 

   Three Months Ended June 30, 2012  Three Months Ended June 30, 2011
   Traditional Timeshare Business  Fee-Based Services Business  Total  % of System-wide sales of VOIs, net (6)  Traditional Timeshare Business  Fee-Based Services Business  Total  % of System-wide sales of VOIs, net(6)
System-wide sales of VOI’s (1)   $56,824   $39,393   $96,217        $52,198   $26,951   $79,149      
Change in sales deferred under timeshare accounting rules   849    —      849           (788)   —      (788)       
System-wide sales of VOIs, net (1)    57,673    39,393    97,066    100%   51,410    26,951    78,361    100%
Less: Sales of third-party VOIs   —      (39,393)   (39,393)    (41)   —      (26,951)   (26,951)    (34)
Gross sales of VOIs   57,673    —      57,673    59    51,410    —      51,410    66 
Estimated uncollectible VOI notes receivable (2)   (6,426)   —      (6,426)    (11)   (6,632)   —      (6,632)    (13)
Sales of VOIs   51,247    —      51,247    53    44,778    —      44,778    57 
Cost of VOIs sold (3)   (9,623)   —      (9,623)    (19)   (10,116)   —      (10,116)    (23)
Gross profit (3)   41,624    —      41,624    81    34,662    —      34,662    77 
Fee-based sales commission revenue   —      25,703    25,703    26    —      18,308    18,308    23 
Other resort fee-based services revenues   —      18,875    18,875    19    —      17,287    17,287    22 
Cost of other resort  fee-based services   —      (10,241)   (10,241)   (11)   —      (9,231)   (9,231)   (12)
Net carrying cost of VOI inventory   (1,710)   —      (1,710)   (2)   (2,925)   —      (2,925)   (4)
Selling and marketing expense (4)   (24,324)   (16,614)   (40,938)   (42)   (22,972)   (12,046)   (35,018)   (45)
Resorts G & A expense (4)   (3,085)   (2,108)   (5,193)   (5)   (3,113)   (1,632)   (4,745)    (6)
Bluegreen Resorts operating profit (5)  $12,505   $15,615   $28,120     29%  $5,652   $12,686   $18,338     23%

 

   Six Months Ended June 30, 2012  Six Months Ended June 30, 2011
   Traditional Timeshare Business  Fee-Based Services Business  Total  % of System-wide sales of VOIs, net (6)  Traditional Timeshare Business  Fee-Based Services Business  Total  % of System-wide sales of VOIs, net(6)
System-wide sales of VOI’s (1)   $111,815   $59,115   $170,930        $93,762   $43,861   $137,623      
Change in sales deferred under timeshare accounting rules   (4,154)    —      (4,154)          (1,304)   —      (1,304)       
System-wide sales of VOIs, net (1)    107,661    59,115    166,776    100%   92,458    43,861    136,319    100%
Less: Sales of third-party VOIs   —       (59,115)   (59,115)    (35)   —      (43,861)   (43,861)    (32)
Gross sales of VOIs   107,661    —      107,661    65    92,458    —      92,458    68 
Estimated uncollectible VOI notes receivable (2)   (13,094)    —      (13,094)    (12)   (10,751)   —      (10,751)    (12)
Sales of VOIs   94,567    —      94,567    57    81,707    —      81,707    60 
Cost of VOIs sold (3)   (18,765)   —      (18,765)    (20)   (20,654)   —      (20,654)    (25)
Gross profit (3)   75,802    —      75,802    80    61,053    —      61,053    75 
Fee-based sales commission revenue   —      38,481    38,481    23    —      29,072    29,072    21 
Other resort fee-based services revenues   —      37,690    37,690    23    —      34,487    34,487    25 
Cost of other resort  fee-based services   —      (19,835)   (19,835)   (12)   —      (18,170)   (18,170)   (13)
Net carrying cost of VOI inventory   (5,102)   —      (5,102)   (3)   (7,067)   —      (7,067)   (5)
Selling and marketing expense (4)   (47,508)   (26,086)   (73,594)   (44)   (43,101)   (20,446)   (63,547)   (47)
Resorts G & A expense (4)   (6,241)   (3,427)   (9,668)    (6)   (6,057)   (2,874)   (8,931)    (7)
Bluegreen Resorts operating profit (5)  $16,951   $26,823   $43,774     26%  $4,828   $22,069   $26,897     20%

 

 
 

(1) Amounts for “Fee-Based Services Business” represent sales of VOIs made on behalf of third parties, which are transacted as sales of timeshare interests in the Bluegreen Vacation Club and through the same sales and marketing process as the sale of the Company’s VOI inventory included under “Traditional Timeshare Business.”

 

(2) Percentages for estimated uncollectible VOI notes receivable are calculated as a percentage of gross sales of VOIs.

 

(3) Percentages for cost of VOIs sold and the associated gross profit are calculated as a percentage of sales of VOIs.

 

(4) Selling and marketing expenses and Resorts G&A expenses are allocated pro rata based on system-wide sales of VOIs, net.

 

(5) General and administrative expenses attributable to corporate overhead have been excluded from the table. Corporate general and administrative expenses totaled $11.4 million and $8.8 million for the three months ended June 30, 2012 and 2011, respectively and $24.7 million and $19.2 million for the six months ended June 30, 2012 and 2011, respectively.

 

(6) Unless otherwise indicated.

 

System-wide sales of VOIs rose to $96.2 million in Q2 2012 from $79.1 million in Q2 2011. This reflects an increase in the number of total sales transactions (8,378 in Q2 2012 from 6,559 in Q2 2011), the result of increased tour flow and improved total sale-to-tour conversion ratio (17.1% in Q2 2012, up from 14.5% in Q2 2011) and new prospect sale-to-tour conversion ratio (12.0% in Q2 2012 as compared to 10.2% in Q2 2011), partially offset by a lower average sales price per transaction ($11,748 for Q2 2012 as compared to $12,250 for Q2 2011). Total prospect tours in Q2 2012 were 48,963 as compared to 45,348 in Q2 2011, with new prospect tours rising to 28,949 in Q2 2012 from 26,966 in Q2 2011.

 

System-wide sales also include Bluegreen’s sales of VOI inventory in connection with a new category of sales requiring low levels of capital deployment whereby we acquire VOI inventory from our resorts’ property owner associations (“POA Sales”) on a non-committed basis, in close proximity to the timing of our selling of such VOIs. These VOIs are typically obtained by the POAs through foreclosure in connection with maintenance fee defaults and are generally acquired by us at a discount. In the three and six months ended June 30, 2012, POA Sales are included within the results of Bluegreen’s Traditional Timeshare Business in the tables above.

 

Mr. Maloney commented, “This new program has demonstrated promising early results, with system-wide sales for the 2012 three and six month periods of $4.4 million and $7.9 million, respectively. We also currently intend to enter into similar ‘just-in-time’ inventory acquisition arrangements with third-party developers as part of our fee-based services initiative.”

 

Cost of VOIs sold represented 19% and 23% of sales of VOIs in Q2 2012 and Q2 2011, respectively. Cost of VOIs sold as a percentage of sales of VOIs varies between periods based on the relative costs of the specific VOIs sold in each period. Additionally, changes in assumptions, including estimated project sales, future defaults, upgrades and estimated incremental revenue from the resale of repossessed VOI inventory and the size of the point packages of the VOIs sold (due to offered volume discounts, including consideration of cumulative sales to existing owners) are reflected on a prospective basis in the period the change occurs.

 

As a percentage of system-wide sales of VOIs, net, selling and marketing expenses decreased to 42% in Q2 2012 from 45% in Q2 2011, due to changes in the mix of marketing programs and a higher sale-to-tour conversion ratio. Sales to existing Bluegreen owners as a percentage of system-wide sales of VOIs was 57% in both Q2 2012 and Q2 2011.

 

Operating profit at Resorts rose to $28.1 million, or 29% of system-wide sales of VOI’s, net, for Q2 2012 from operating profit of $18.3 million, or 23% of system-wide sales of VOI’s, net, for Q2 2011.

 

INTEREST INCOME AND INTEREST EXPENSE

Net interest spread is the excess of interest income over interest expense. Pre-tax income from net interest spread in Q2 2012 rose to $10.6 million from $10.0 million in Q2 2011, due to a decrease in interest expense as Bluegreen continues to reduce the level of debt on its balance sheet, partially offset by lower interest income resulting from the continued decline in Bluegreen’s VOI notes receivable portfolio due to both the maturing of the portfolio as well as our efforts to increase cash sales and collect higher down payments on those VOI sales that we do finance.

 

 
 

DISCONTINUED OPERATIONS

Bluegreen Communities, which is reported as discontinued operations in all periods presented, marketed residential homesites, the majority of which were sold directly to retail customers seeking to build a home generally in the future, and operated daily-fee golf courses. As previously announced, on May 4, 2012, substantially all of the assets which comprised Bluegreen Communities were sold to Southstar Development Partners, Inc. for a purchase price of $29.0 million in cash, the majority of which was used to pay outstanding debt which was collateralized by the Bluegreen Communities assets. Bluegreen may also receive certain contingent consideration based on Southstar’s sale, if any, of two properties sold to Southstar as part of the transaction. The loss from discontinued operations, net of income tax benefit for Q2 2012 was $1.4 million, or $0.04 per diluted share, compared to a loss of $36.4 million, or $1.13 per diluted share, in Q2 2011.

 

ABOUT BLUEGREEN CORPORATION

Founded in 1966 and headquartered in Boca Raton, FL, Bluegreen Corporation (NYSE:BXG) is a leading timeshare sales, marketing and resort management company. Bluegreen manages, markets and sells the Bluegreen Vacation Club, a flexible, points-based, deeded vacation ownership plan with more than 160,000 owners, over 59 owned or managed resorts, and access to more than 4,000 resorts worldwide. Bluegreen also offers a portfolio of comprehensive, turnkey, fee-based service resort management, financial services, and sales and marketing on behalf of third parties. For more information, visit www.bluegreencorp.com.

 

Additional Information and Where to Find it

 

BFC has filed a Registration Statement on Form S-4 with the Securities Exchange Commission (the "SEC"), which has been declared effective, and BFC and Bluegreen have mailed to their respective shareholders a joint proxy statement/prospectus concerning the proposed merger between the companies. BFC and Bluegreen may also file other documents with the SEC regarding the merger. Investors and shareholders of BFC and Bluegreen are urged to read the joint proxy statement/prospectus and other relevant documents filed with the SEC carefully and in their entirety because they contain important information. Investors and shareholders of BFC and Bluegreen can obtain copies of the joint proxy statement/prospectus and other relevant documents filed with the SEC free of charge from the SEC's website at www.sec.gov. Copies of the documents filed with the SEC by BFC are also available free of charge on BFC's website at www.bfcfinancial.com under the tab "Investor Relations -Regulatory Info - SEC Filings" or by directing a request by mail to BFC Financial Corporation, Corporate Secretary, 2100 West Cypress Creek Road, Fort Lauderdale, Florida 33309, or by phone at 954-940-4900. Copies of the documents filed with the SEC by Bluegreen are available free of charge on Bluegreen's website at www.bluegreencorp.com under the tab "Investors - SEC Filings" or by directing a request by mail to Bluegreen Corporation, Corporate Secretary, 4960 Conference Way North, Suite 100, Boca Raton, Florida 33431, or by phone at 561-912-8000.

 

Statements in this release may constitute forward-looking statements and are made pursuant to the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. Forward looking statements are based largely on expectations and are subject to a number of risks and uncertainties including, but not limited to, the risks and uncertainties associated with economic, credit market, competitive and other factors affecting the Company and its operations, markets, products and services; risks relating to the proposed merger with BFC, including that the anticipated benefits of the merger may not be realized and the risk that the merger may not be consummated in accordance with the contemplated terms, in the contemplated timeframe, or at all; the Company’s efforts to improve its liquidity through cash sales and larger down payments on financed sales may not be successful; the performance of the Company’s VOI notes receivable may deteriorate, and the FICO® score-based credit underwriting standards may not have the expected effects on the performance of the receivables; the Company may not be in a position to draw down on its existing credit lines or may be unable to renew, extend, or replace such lines of credit; the Company may require new credit lines to provide liquidity for its operations, including facilities to sell or finance its notes receivable; the Company may not be able to successfully securitize additional timeshare loans and/or obtain adequate receivable credit facilities in the future; risks relating to pending or future litigation, regulatory proceedings, claims and assessments; sales and marketing strategies may not be successful; marketing costs may increase and not result in increased sales; system-wide sales, including sales on behalf of third parties and sales to existing owners, may not continue at current levels or they may decrease; fee-based service initiatives may not be successful and may not grow or generate profits as anticipated; POA Sales may not continue at current levels or may decrease, and we may not be successful in our efforts to enter into similar arrangements with third-party developers in connection with our fee-based services business; risks related to other financial trends discussed in this press release, including that the volume of tours and the sale-to-tour conversion ratio may not continue at current levels or decrease, the Company may be required to further increase its allowance for loan losses in the future and record additional impairment charges as a result of any such increase; selling and marketing expenses as a percentage of system-wide sales of VOIs, net may not remain at current levels or they may increase; and the Company’s indebtedness may increase in the future; and the risks and other factors detailed in the Company’s SEC filings, including those contained in the “Risk Factors” sections of such filings.

 

 
 

Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

(In 000's, except per share data)

(Unaudited)

 

   For the Three Months Ended
June 30,
  For the Six Months Ended
June 30,
             
   2012  2011  2012  2011
                     
Revenues:                    
Gross sales of VOI  $57,673   $51,410   $107,661   $92,458 
Estimated uncollectible VOI notes receivable   (6,426)   (6,632)   (13,094)   (10,751)
Sales of VOIs   51,247    44,778    94,567    81,707 
                     
Fee-based sales commission revenue   25,703    18,308    38,481    29,072 
Other fee-based services revenue   18,875    17,287    37,690    34,487 
Interest income   21,688    23,902    43,566    48,458 
Other income, net   —      —      382    —   
    117,513    104,275    214,686    193,724 
                     
Costs and expenses:                    
Cost of VOIs sold   9,623    10,116    18,765    20,654 
Cost of other resort fee-based services   11,951    12,156    24,937    25,237 
Selling, general and administrative expenses   58,296    49,406    109,363    93,350 
Interest expense   11,071    13,903    22,423    28,521 
Other expense, net   —      1,239    —      915 
    90,941    86,820    175,488    168,677 
                     
Income before non-controlling interest, provision for income taxes, and discontinued operations   26,572    17,455    39,198    25,047 
Provision for income taxes   9,680    6,186    13,812    8,712 
Income from continuing operations   16,892    11,269    25,386    16,335 
Loss from discontinued operations, net of income taxes   (1,393)   (36,386)   (1,696)   (37,762)
Net income (loss)   15,499    (25,117)   23,690    (21,427)
Less: Net income attributable to non-controlling interest   2,239    1,582    4,781    2,741 
Net income (loss) attributable to Bluegreen Corporation  $13,260   $(26,699)  $18,909   $(24,168)
                     
Income (loss) attributable to Bluegreen Corporation per common share - Basic                    
Earnings per share from continuing operations attributable to Bluegreen shareholders  $0.47   $0.31   $0.66   $0.44 
Loss per share from discontinued operations   (0.04)   (1.17)   (0.05)   (1.21)
Earnings (loss) per share attributable to Bluegreen shareholders  $0.42   $(0.86)  $0.61   $(0.77)
                     
Income (Loss) attributable to Bluegreen Corporation per common share - Diluted                    
Earnings per share from continuing operations attributable to Bluegreen shareholders  $0.46   $0.30   $0.65   $0.42 
Loss per share from discontinued operations   (0.04)   (1.13)   (0.05)   (1.18)
Earnings (loss) per share attributable to Bluegreen shareholders  $0.42   $(0.83)  $0.60   $(0.76)
                     
Weighted average number of common shares:                    
Basic   31,264    31,210    31,254    31,194 
Diluted   31,568    32,156    31,500    32,082 
                     
Comprehensive income (loss) attributable to Bluegreen Corporation  $13,260   $(26,699)  $18,909   $(24,168)

 

 
 

Condensed Consolidated Balance Sheets

(In 000's, except per share data)

 

   June 30,  December 31,
    2012  2011
ASSETS  (Unaudited)   
           
Unrestricted cash and cash equivalents  $65,505   $80,931 
Restricted cash ($39,823 and $38,913 in VIEs in  June 30, 2012 and December 31, 2011, respectively)   59,478    51,125 
Notes receivable, net ($353,631 and $375,904 in VIEs at June 30, 2012 and December 31, 2011, respectively)   491,800    512,517 
Inventory   293,489    302,843 
Prepaid expenses   11,101    4,120 
Other assets   52,269    47,100 
Property and equipment, net   69,060    70,112 
Assets held for sale    —      28,625 
         Total assets   $1,042,702   $1,097,373 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Liabilities          
Accounts payable  $13,297   $8,834 
Accrued liabilities and other   65,984    62,878 
Deferred income   27,873    24,549 
Deferred income taxes   27,791    15,776 
Receivable-backed notes payable - recourse ($12,879 and $15,826 in VIEs at June 30, 2012 and December 31, 2011, respectively)   99,059    110,016 
Receivable-backed notes payable - non-recourse (in VIEs)   339,578    369,314 
Lines-of-credit and notes payable   32,536    86,817 
Junior subordinated debentures    110,827    110,827 
  Total liabilities  $716,945   $789,011 
           
           
Shareholders' Equity          
Preferred stock, $.01 par value, 1,000 shares authorized; none issued   —      —   
Common stock, $.01 par value, 140,000 shares authorized; 31,347 and 31,288 shares issued June 30, 2012 and December 31, 2011, respectively   313    313 
Additional paid-in capital   193,054    191,999 
Retained earnings    95,927    77,018 
    Total Bluegreen Corporation shareholders' equity   289,294    269,330 
Non-controlling interest    36,463    39,032 
    Total shareholders’  equity    325,757    308,362 
         Total liabilities and shareholders' equity   $1,042,702   $1,097,373 

 

 


The following information was filed by BLUEGREEN CORP on Wednesday, August 8, 2012 as an 8K 2.02 statement, which is a press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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  • Form Type: Annual
  • Number of times amended: 0
  • Accession Number: 0001171200-13-000050
  • Submitted to the SEC: Monday, April 1, 2013
  • Accepted by the SEC: Monday, April 1, 2013
  • Period Ending: December 2012