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 THIRD QUARTER FINANCIAL RESULTS

 

Q3 2012 Overview

· Bluegreen Resorts (“Resorts”) system-wide sales of vacation ownership interests (“VOIs”) increased 19.9% to $109.1 million from $91.0 million in Q3 2011.
· Sales of VOIs made on behalf of Resorts’ fee-based services clients, which are included in system-wide sales above, rose 22.7% to $41.7 million from $34.0 million in Q3 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 24.1% to $12.0 million, or $0.38 per diluted share, from $9.7 million, or $0.30 per diluted share, in Q3 2011.
· Net income rose to $11.7 million, or $0.37 per diluted share, from net income of $7.1 million, or $0.22 per diluted share, in Q3 2011. Q3 2011 included a loss from discontinued operations of $2.6 million, or $0.08 per diluted share, related to Bluegreen Communities, substantially all of the assets of which were sold in May 2012. Q3 2012 loss from discontinued operations of approximately $0.3 million, or $0.01 per diluted share, was related to expenses incurred to satisfy a portion of the obligations of Bluegreen Communities not assumed by the buyer.
· Unrestricted cash and cash equivalents at September 30, 2012 of $100.2 million.

 

Boca Raton, Fla. – November 15, 2012 – Bluegreen Corporation (NYSE: BXG), a leading timeshare sales, marketing and resort management company, today announced financial results for the quarter and nine months ended September 30, 2012.

 

John M. Maloney Jr., President and Chief Executive Officer of Bluegreen, commented, “We performed well in the third quarter of 2012, as evidenced by growth at both our traditional VOI and fee-based services businesses, as well as increases in sales tours and sale-to-tour conversion ratios. Our fee-based services business represented approximately 39% and 37% of total system-wide VOI sales for the three and nine months ended September 30, 2012, respectively, up from approximately 37% and 34% in the same respective periods last year. In September, we completed the sale of $100 million of investment-grade timeshare loan-backed notes in a term securitization transaction. This transaction allowed us to refinance at a 2.94% fixed interest rate receivables that were previously pledged under certain of our variable-rate credit facilities, and create approximately $60 million of additional availability under existing receivable-backed credit facilities. Through the first nine months of 2012, we generated free cash flow (defined as cash flow from operating and investing activities)of $138.7 million (including $27.8 million of proceeds from the sale of Bluegreen Communities, prior to the payment of $22.7 million of Bluegreen Communities’ debt and related fees) and reduced outstanding debt by approximately $107.3 million.”

 

Additional Q3 2012 operating highlights included:

· In connection with its fee-based services business, Resorts sold $41.7 million of third-party VOIs in Q3 2012, generating sales and marketing commissions of approximately $27.8 million. This compares to sales of $34.0 million of third-party VOIs in Q3 2011, which generated sales and marketing commissions of $23.5 million.

 

 
 

 

· Total revenues from fee-based services rose 11.6% to $47.2 million in Q3 2012 from $42.3 million in Q3 2011. Fee-based services contributed an estimated $16.5 million to Resorts operating profit in Q3 2012, compared to an estimated $14.5 million in Q3 2011. As of September 30, 2012, Bluegreen managed 46 timeshare resort properties compared to 45 as of September 30, 2011.

BLUEGREEN RESORTS

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

Three and Nine Months Ended September 30, 2012 and 2011

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

 

    Three Months Ended September 30, 2012   Three Months Ended September 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)   $ 67,421     $ 41,698     $ 109,119             $ 56,993     $ 33,983     $ 90,976          
Change in sales deferred under timeshare accounting rules     (2,095 )     —         (2,095 )             (335 )     —         (335 )        
System-wide sales of VOIs, net (1)     65,326       41,698       107,024       100 %     56,658       33,983       90,641       100 %
Less: Sales of third-party VOIs     —         (41,698 )     (41,698 )     (39 )     —         (33,983 )     (33,983 )     (37 )
Gross sales of VOIs     65,326       —         65,326       61       56,658       —         56,658       63  
Estimated uncollectible VOI notes receivable (2)     (8,354 )     —         (8,354 )     (13 )     (10,770 )     —         (10,770 )     (19 )
Sales of VOIs     56,972       —         56,972       53       45,888       —         45,888       51  
Cost of VOIs sold (3)     (12,590 )     —         (12,590 )     (22 )     (11,349 )     —         (11,349 )     (25 )
Gross profit (3)     44,382       —         44,382       78       34,539       —         34,539       75  
Fee-based sales commission revenue     —         27,798       27,798       26       —         23,460       23,460       26  
Other resort fee-based services revenues     —         19,401       19,401       18       —         18,838       18,838       21  
Cost of other resort  fee-based services     —         (9,083 )     (9,083 )     (8 )     —         (10,550 )     (10,550 )     (12 )
Net carrying cost of VOI inventory     (1,333 )             (1,333 )     (1 )     (2,362 )     —         (2,362 )     (3 )
Selling and marketing expense (4)     (30,375 )     (19,388 )     (49,763 )     (46 )     (25,462 )     (15,272 )     (40,734 )     (45 )
Resorts G & A expense (4)     (3,441 )     (2,196 )     (5,637 )     (5 )     (3,334 )     (2,000 )     (5,334 )     (6 )
Bluegreen Resorts operating profit (5)   $ 9,234     $ 16,531     $ 25,765       24 %   $ 3,381     $ 14,476     $ 17,857       20 %

 

      Nine Months Ended September 30, 2012   Nine Months Ended September 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)   $ 179,236     $ 100,813     $ 280,049             $ 150,755     $ 77,844     $ 228,599          
Change in sales deferred under timeshare accounting rules     (6,249 )     —         (6,249 )             (1,639 )     —         (1,639 )        
System-wide sales of VOIs, net (1)     172,987       100,813       273,800       100 %     149,116       77,844       226,960       100 %
Less: Sales of third-party VOIs     —         (100,813 )     (100,813 )     (37 )     —         (77,844 )     (77,844 )     (34 )
Gross sales of VOIs     172,987       —         172,987       63       149,116       —         149,116       66  
Estimated uncollectible VOI notes receivable (2)     (21,448 )     —         (21,448 )     (12 )     (21,521 )     —         (21,521 )     (14 )
Sales of VOIs     151,539       —         151,539       55       127,595       —         127,595       56  
Cost of VOIs sold (3)     (31,355 )     —         (31,355 )     (21 )     (32,003 )     —         (32,003 )     (25 )
Gross profit (3)     120,184       —         120,184       79       95,592       —         95,592       75  
Fee-based sales commission revenue     —         66,279       66,279       24       —         52,532       52,532       23  
Other resort fee-based services revenues     —         57,091       57,091       21       —         53,325       53,325       23  
Cost of other resort  fee-based services     —         (28,918 )     (28,918 )     (11 )     —         (28,286 )     (28,286 )     (12 )
Net carrying cost of VOI inventory     (6,435 )     —         (6,435 )     (2 )     (9,863 )     —         (9,863 )     (4 )
Selling and marketing expense (4)     (77,937 )     (45,420 )     (123,357 )     (45 )     (68,514 )     (35,767 )     (104,281 )     (46 )
Resorts G & A expense (4)     (9,670 )     (5,635 )     (15,305 )     (6 )     (9,372 )     (4,893 )     (14,265 )     (6 )
Bluegreen Resorts operating profit (5)   $ 26,142     $ 43,397     $ 69,539       25 %   $ 7,843     $ 36,911     $ 44,754       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 $13.5 million and $9.3 million for the three months ended September 30, 2012 and 2011, respectively, and $38.2 million and $28.5 million for the nine months ended September 30, 2012 and 2011, respectively.

 

(6) Unless otherwise indicated.

 

 
 

System-wide sales of VOIs rose to $109.1 million in Q3 2012 from $91.0 million in Q3 2011. This reflects an increase in the number of total prospect tours (55,825 in Q3 2012 from 48,773 in Q3 2011) along with an improved total sale-to-tour conversion ratio (16.6% in Q3 2012, up from 15.7% in Q3 2011) . Bluegreen also realized a higher average sales price per transaction ($11,976 for Q3 2012 as compared to $11,851 for Q3 2011). New prospect tours, included in total prospect tours above, rose to 33,714 in Q3 2012 from 29,125 in Q3 2011.

 

System-wide sales also include Bluegreen’s sales of VOI inventory in connection with a new category of sales, which we commenced during January 2012, requiring low levels of capital deployment whereby we acquire VOI inventory from our resorts’ property owner associations (“POAs”) on a non-committed basis, in close proximity to the timing of our selling of such VOIs (“POA Sales”). 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 nine months ended September 30, 2012, POA Sales, which are included within the results of Bluegreen’s Traditional Timeshare Business in the tables above, were $5.1 million and $13.0 million, respectively.

 

Cost of VOIs sold represented 22% and 25% of sales of VOIs in Q3 2012 and Q3 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 increased to 46% in Q3 2012 from 45% in Q3 2011. Sales to existing Bluegreen owners as a percentage of system-wide sales of VOIs was 56% in Q3 2012 as compared to 55% Q3 2011. If Bluegreen shifts its marketing efforts more to selling to new customers as opposed to existing owners, its marketing expenses will increase as a percentage of sales.

 

Operating profit at Resorts rose to $25.8 million, or 24% of system-wide sales of VOI’s, net, for Q3 2012 from operating profit of $17.9 million, or 20% of system-wide sales of VOI’s, net, for Q3 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 Q3 2012 rose to $10.8 million from $10.3 million in Q3 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 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 sold in the transaction. 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. Certain assets relating to Bluegreen Communities, including primarily Bluegreen Communities’ notes receivable portfolio, were excluded from the sale.

 

 
 

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.

 

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; 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 September 30,   For the Nine Months Ended     September 30,
                 
    2012   2011   2012   2011
                                 
Revenues:                                
Gross sales of VOI   $ 65,326     $ 56,658     $ 172,987     $ 149,116  
Estimated uncollectible VOI notes receivable     (8,354 )     (10,770 )     (21,448 )     (21,521 )
Sales of VOIs     56,972       45,888       151,539       127,595  
                                 
Fee-based sales commission revenue     27,798       23,460       66,279       52,532  
Other fee-based services revenue     19,401       18,838       57,091       53,325  
Interest income     21,485       23,533       65,051       71,986  
Other income, net     377       —         759       —    
      126,033       111,719       340,719       305,438  
                                 
Costs and expenses:                                
Cost of VOIs sold     12,590       11,349       31,355       32,003  
Cost of other resort fee-based services     10,416       12,912       35,353       38,149  
Selling, general and administrative expenses     69,482       56,098       178,845       149,448  
Interest expense     10,651       13,225       33,074       41,746  
Other expense, net     —         —         —         910  
      103,139       93,584       278,627       262,256  
                                 
Income before non-controlling interest, provision for income taxes, and discontinued operations     22,894       18,135       62,092       43,182  
Provision for income taxes     8,149       5,939       21,960       14,650  
Income from continuing operations     14,745       12,196       40,132       28,532  
Loss from discontinued operations, net of income taxes     (347 )     (2,626 )     (2,043 )     (40,389 )
Net income (loss)     14,398       9,570       38,089       (11,857 )
  Less: Net income attributable to non-controlling interest     2,738       2,520       7,519       5,261  
Net income (loss) attributable to Bluegreen Corporation   $ 11,660     $ 7,050     $ 30,570     $ (17,118 )
                                 
Income (loss) attributable to Bluegreen Corporation per common share - Basic                                
Earnings per share from continuing operations attributable to Bluegreen shareholders   $ 0.38     $ 0.31     $ 1.04     $ 0.75  
Loss per share from discontinued operations     (0.01 )     (0.08 )     (0.07 )     (1.29 )
Earnings (loss) per share attributable to Bluegreen shareholders   $ 0.37     $ 0.23     $ 0.98     $ (0.55 )
                                 
Income (Loss) attributable to Bluegreen Corporation per common share - Diluted                                
Earnings per share from continuing operations attributable to Bluegreen shareholders   $ 0.38     $ 0.30     $ 1.03     $ 0.71  
Loss per share from discontinued operations     (0.01 )     (0.08 )     (0.06 )     (1.26 )
Earnings (loss) per share attributable to Bluegreen shareholders   $ 0.37     $ 0.22     $ 0.97     $ (0.53 )
                                 
Weighted average number of common shares:                                
   Basic     31,347       31,245       31,288       31,211  
   Diluted     31,605       32,429       31,554       32,156  
                                 
Comprehensive income (loss) attributable to Bluegreen Corporation   $ 11,660     $ 7,050     $ 30,570     $ (17,118 )

 

 
 

Condensed Consolidated Balance Sheets

(In 000's, except per share data)

 

    September 30,   December 31,
    2012   2011
ASSETS   (Unaudited)    
                 
Unrestricted cash and cash equivalents   $ 100,236     $ 80,931  
Restricted cash ($35,876 and $38,913 in VIEs at September 30, 2012 and December 31, 2011, respectively)     60,148       51,125  
Notes receivable, net ($370,121 and $375,904 in VIEs at September 30, 2012 and December 31, 2011, respectively)     489,440       512,517  
Inventory     280,569       302,843  
Prepaid expenses     8,563       4,120  
Other assets     52,901       47,100  
Property and equipment, net     69,157       70,112  
Assets held for sale     —         28,625  
         Total assets   $ 1,061,014     $ 1,097,373  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Liabilities                
Accounts payable   $ 10,908     $ 8,834  
Accrued liabilities and other     73,811       62,878  
Deferred income     30,304       24,549  
Deferred income taxes     35,546       15,776  
Receivable-backed notes payable - recourse ($11,511 and $15,826 in VIEs at September 30, 2012 and December 31, 2011, respectively)     65,063       110,016  
Receivable-backed notes payable - non-recourse (in VIEs)     373,385       369,314  
Lines-of-credit and notes payable     20,396       86,817  
Junior subordinated debentures     110,827       110,827  
  Total liabilities     720,240     $ 789,011  
                 
Shareholders' Equity                
Preferred stock, $.01 par value, 1,000 shares authorized; none issued     —         —    
Common stock, $.01 par value, 140,000 shares authorized;                
31,349 and 31,288 shares issued at September 30, 2012 and December 31, 2011, respectively     313       313  
Additional paid-in capital     193,672       191,999  
Retained earnings     107,588       77,018  
    Total Bluegreen Corporation shareholders' equity     301,573       269,330  
Non-controlling interest     39,201       39,032  
    Total shareholders’  equity     340,774       308,362  
         Total liabilities and shareholders' equity   $ 1,061,014     $ 1,097,373  

 

 


The following information was filed by BLUEGREEN CORP on Friday, November 16, 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