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BLUEGREEN VACATIONS CORPORATION REPORTS THIRD QUARTER 2018 RESULTS



BOCA RATON, Florida (November 5, 2018) – Bluegreen Vacations Corporation (NYSE: BXG) ("Bluegreen" or the “Company") today reported its third quarter 2018 financial results.



3Q18 Highlights



·

Earnings Per Share (“EPS”) increased 3.8% to $0.27

·

Adjusted EBITDA of $34.9 million, which was negatively impacted by lost business associated with Hurricane Florence, which we estimate to have been $2.3 million of EBITDA

·

Total revenues increase of $7.0 million, or 3.6%, to $202.2 million

·

Growth in System-Wide Sales of Vacation Ownership Interests (“VOIs”) of 1.1% (or 4.5% excluding the $5.8 million of sales we estimated to have been lost as a result of Hurricane Florence)

·

Subsequent to quarter end, completed a $117.7 million securitization of vacation ownership loans with a fixed, weighted-average interest rate coupon of 4.02%



“During the third quarter, the Company achieved a 3.8% increase in EPS as we continued to execute on our strategy of providing our owners with a lifetime of vacations in our unique and experiential vacation ownership resorts,” said Shawn B. Pearson, Chief Executive Officer and President. “While we were fortunate to have sustained minimal physical damage from Hurricane Florence, the hurricane unfortunately did impact tours, sales and earnings due to weather-related cancellations.”  



Mr. Pearson continued, “Our primary focus is to continue to enhance our platform to support long term sustained growth that scales with our business. We are ramping up our sales efforts at the resorts we recently acquired, and are working on various marketing initiatives, including focusing our digital initiatives to make our marketing programs more efficient and effective. Our platform is at the heart of our investments, having just completed the implementation of an upgraded sales and inventory technology system. Finally, we are pleased with the successful securitization we recently closed which was well accepted by the market and achieved what we believe are attractive terms and pricing. While we are confident in the ongoing demand for our vacation ownership resorts, our near term expectation for sales growth is consistent with recent performance. We are continuing to seek to augment our sales and marketing channels and expect that these efforts will deliver long term growth and shareholder value.



Financial Results

(dollars in millions, except per share data)



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 



2018

 

2017

 

Change

 

2018

 

2017

 

Change



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

$

202.2 

 

$

195.2 

 

3.6 

%

 

$

564.7 

 

$

544.9 

 

3.6 

%

Income before non-controlling interest and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  provision for income taxes

$

32.5 

 

$

34.4 

 

(5.4)

%

 

$

102.7 

 

$

108.1 

 

(5.0)

%

Net income attributable to shareholders

$

20.5 

 

$

18.5 

 

10.5 

%

 

$

68.2 

 

$

60.2 

 

13.3 

%

Earnings per share Basic and diluted

$

0.27 

 

$

0.26 

 

3.8 

%

 

$

0.91 

 

$

0.85 

 

7.1 

%

Adjusted EBITDA

$

34.9 

 

$

39.1 

 

(10.8)

%

 

$

110.1 

 

$

114.8 

 

(4.1)

%

Capital-light revenue(1) as a percentage of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total revenue

 

69.2% 

 

 

70.1% 

 

(90)

bp

 

 

71.1% 

 

 

69.1% 

 

200 

bp



(1)

Bluegreen's "capital-light" revenue includes revenue from the sales of VOIs under fee-based sales and marketing arrangements, just-in-time inventory acquisition arrangements, and secondary market arrangements, as well as other fee-based services revenue and cost reimbursements revenue.

 

 


 

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Total Revenues for the three months ended September 30, 2018 increased by $7.0 million, or 3.6%, to $202.2 million from the prior year period, primarily driven by increased Resort Operations and Club Management Revenues.  Adjusted EBITDA was $34.9 million in the third quarter of 2018 compared to $39.1 million in the third quarter of 2017.



The third quarter of 2018 was negatively impacted by Hurricane Florence which hit North and South Carolina in September. The Company’s nine Club Resorts and two Club Associate Resorts in the primary path of the Hurricane suffered relatively minor damage, but the storm caused guest and owner cancellations which we estimate resulted in lost system-wide sales in the third quarter of 2018 of approximately $5.8 million, with the related estimated EBITDA impact of approximately $2.3 million.  



Corporate & Other General and Administrative expenses were $20.3 million in the third quarter of 2018 compared to $17.4 million in the third quarter of 2017. The year over year increase was due to a number of factors including: higher outside legal expenses in connection with intensified focus on vigorously defending claims which the Company believes to be frivolous; increased depreciation expense in connection with information technology assets to support the Company’s growth; and investor and public relations activities related to being a public company.



Segment Results



Sales of VOIs and Financing Segment

(dollars in millions, except per guest and per transaction amounts)

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 



2018

 

2017

 

Change

 

2018

 

2017

 

Change



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

System-wide sales of VOIs

$

173.3 

 

$

171.4 

 

1.1 

%

 

$

478.1 

 

$

467.3 

 

2.3 

%

Segment adjusted EBITDA

$

44.9 

 

$

48.8 

 

(7.9)

%

 

$

136.9 

 

$

137.1 

 

(0.2)

%

Guest tours

 

66,434 

 

 

69,479 

 

(4.4)

%

 

 

182,183 

 

 

193,687 

 

(5.9)

%

Average sales price per transaction

$

15,988 

 

$

15,055 

 

6.2 

%

 

$

15,576 

 

$

15,440 

 

0.9 

%

Sales to tour conversion ratio

 

16.5% 

 

 

16.7% 

 

(1.2)

%

 

 

17.0% 

 

 

15.8% 

 

7.6 

%

Sales volume per guest ("VPG")

$

2,636 

 

$

2,513 

 

4.9 

%

 

$

2,647 

 

$

2,442 

 

8.4 

%

Selling and marketing expenses, as a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of system-wide sales of VOIs

 

49.0% 

 

 

51.4% 

 

(240)

bp

 

 

48.9% 

 

 

51.8% 

 

(290)

bp

Provision for loan losses

 

17.0% 

 

 

14.9% 

 

210 

bp

 

 

15.5% 

 

 

16.0% 

 

(50)

bp

Cost of VOIs sold

 

15.9% 

 

 

10.3% 

 

560 

bp

 

 

10.2% 

 

 

6.4% 

 

380 

bp



During the third quarter of 2018, system-wide sales of VOIs increased $1.9 million, or 1.1%, to $173.3 million, compared to the third quarter of 2017. 



Average sales volume per guest, and average sales price per transaction increased 4.9% and 6.2%, respectively compared to the prior year period, while guest tours declined by 4.4% in the third quarter of 2018 compared to the same period in 2017. The Company believes a key driver of these year over year changes is the Company’s ongoing initiatives to screen the credit qualifications of potential marketing guests.  This initiative has resulted in improved efficiencies in the sales process, but has decreased the number of guest tours at the Company’s sales offices.



The Company’s allowance for loan losses was 17.0% of the applicable sales for the third quarter of 2018 compared to 14.9% in the third quarter of 2017.  This increase was due to additional reserves required on prior years’ loan originations and reflects the ongoing impact of the receipt of letters from attorneys who purport to represent certain VOI owners who then ultimately default on their obligations.  The Company’s average annual default rate for the twelve months ended September 30, 2018 increased to 8.41% as compared to 8.07% during the twelve months ended September 30, 2017.



 

 


 

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Cost of VOIs Sold increased to 15.9% in the third quarter of 2018 from 10.3% in the third quarter of 2017.  During the third quarter of 2018, VOI sales were of comparatively higher cost product and the Company acquired less secondary market VOI inventory as compared to the same period in 2017. As planned, secondary market purchases were temporarily suspended in September 2018 in connection with a computer system conversion. Secondary market inventory on average has a lower cost of acquisition than developed VOIs and reduces Cost of VOIs Sold in the period when purchased, under the relative sales value method of accounting. Secondary market purchases resumed after quarter end.

Fee-based sales commission revenue was $61.6 million in the third quarter of 2018, compared to $70.0 million in the same period in 2017. The year over year change was driven by lower sales of third-party VOI inventory, along with slightly lower commission rates primarily due to the mix of developer sales.



Selling and marketing expenses in the third quarter of 2018 decreased as a percentage of System-Wide Sales due to the increased sales volume per guest noted above, a higher percentage of sales to the Company’s existing owners and the reduction of certain fixed selling and marketing expenses in connection with the “corporate realignment” initiative commenced during the fourth quarter of 2017.



As previously disclosed, the Company and Bass Pro, Inc. (“Bass Pro”) are not in agreement on commissions paid to Bass Pro under the parties’ marketing and promotions agreement as well as other issues regarding the parties’ ongoing relationship.  These discussions are ongoing. The issues raised by Bass Pro have not impacted current operations under the marketing agreement or relative to Bluegreen/Big Cedar Vacations, LLC, the Company’s 51%-owned joint venture with an affiliate of Bass Pro.  While the Company does not believe that any material additional amounts are due to Bass Pro as a result of these matters, any change in the parties’ relationship or in payments or reimbursements made under the agreements could impact future results.



Net carrying cost of VOI Inventory increased to $2.9 million in the third quarter of 2018 as compared to $0.8 million in the same period in 2017.  The increase was primarily associated with the carrying costs of the Éilan Hotel & Spa, which was acquired in April 2018, as well as increased maintenance fees and developer subsidies related to an increase in the Company’s VOI inventory.



Financing revenues, net of financing expense, was $15.0 million in the third quarter of 2018, compared to $15.4 million in the same period in 2017. The year over year change was driven by a higher cost of borrowing for the Company, and lower weighted average interest rates on VOI notes receivable as the Company implemented “risk-based pricing” based on customer’s FICO score.



Resort Operations and Club Management Segment

(dollars in millions)





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended September 30,

 

Nine Months Ended September 30,



2018

 

2017

 

% Change

 

2018

 

2017

 

% Change



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Resort operations and club management revenue

$

44.5 

 

$

39.1 

 

13.7 

%

 

$

127.3 

 

$

113.2 

 

12.5 

%

Segment adjusted EBITDA

$

12.2 

 

$

10.3 

 

18.7 

%

 

$

38.0 

 

$

31.9 

 

19.1 

%

Resorts managed at quarter end

 

49 

 

 

48 

 

2.1 

%

 

 

49 

 

 

48 

 

2.1 

%



In the third quarter of 2018, resort operations and management club revenue increased by $5.4 million, or 13.7%, to $44.5 million from the prior year quarter. The increase was primarily due to an additional resort management contract added since September 30, 2017. Segment adjusted EBITDA grew by 18.7% to $12.2 million.



Balance Sheet and Liquidity

As of September 30, 2018, unrestricted cash and cash equivalents totaled $195.4 million. Bluegreen had availability of approximately $122.8 million under its receivable-backed purchase and credit facilities, inventory lines of credit and corporate credit line as of September 30, 2018, subject to eligible collateral and the terms of the facilities, as applicable.

 

 


 

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On August 15, the Company renewed its revolving timeshare receivables hypothecation facility with Pacific Western Bank. The renewed credit facility agreement extends the revolving advance period to September 2021, with the facility maturing in September 2024 and reduces the interest rate payable by the Company. In each case, periods are subject to an additional 12-month extension at the option of Pacific Western Bank. Maximum permitted outstanding borrowings under the facility are $40.0 million, and, subject to the terms and conditions of the facility, approximately $22.9 million of the facility remained available as of September 30, 2018.    



Subsequent to quarter end, the Company completed a $117.7 million securitization of investment-grade vacation ownership loan-backed notes with a fixed, weighted-average interest rate coupon of 4.02%. Proceeds from the notes sale were primarily used to pay down the balance on certain of the Company’s receivable-backed debt facilities and the balance will be used for general corporate purposes.



Free cash flow, which the Company defines as cash flow from operating activities, less capital expenditures, was $21.4 million for the nine months ended September 30, 2018, compared to $39.3 million for the nine months ended September 30, 2017. The decrease in free cash flow was primarily attributable to sales office expansions, increased information technology spending, acquisition and development of traditional inventory, and decreased working capital, partially offset by lower income tax payments and lower purchases of secondary market and just-in-time inventories. 



Acquisition Activity

As previously disclosed, in July the Company entered into an agreement to acquire inventory and, by 2021, the resort management contract at The Manhattan Club in New York City.  The agreement provides Bluegreen the exclusive right, on a non-committed basis, to acquire the remaining timeshare inventory at The Manhattan Club under Bluegreen’s “capital-light” Secondary Market program through periodic purchases over time, and subject to the terms and conditions of the agreement, the exclusive right to acquire the management contract for The Manhattan Club resort in 2021.



In addition, as previously announced, year to date, the Company has added two additional resorts to its network. The Company acquired the Éilan Hotel & Spa in San Antonio, Texas for approximately $34.3 million, and opened a portion of a planned 13,000 square foot sales office at the Éilan Hotel & Spa in August 2018. The Company also entered into a fee-based service agreement with Marquee Developer, LLC, owner and developer, of The Marquee – formerly known as 144 Elk Luxury Lofts – in New Orleans, Louisiana, which will add 94 units of resort inventory.  The Marquee resort VOIs will be sold through The Bluegreen Vacation Club, and is expected to be open for Vacation Club guests in 2019.  The Company intends to open a 5,700 square foot sales office at the Marquee.



Dividend

On October 17, 2018, Bluegreen’s Board of Directors declared a cash dividend payment of $0.15 per share of common stock. The dividend is payable November 15, 2018 to shareholders of record on the close of trading on October 31, 2018.



Third Quarter 2018 Earnings Call and Webcast

The Company has provided a pre-recorded business update and management presentation via webcast link, listed below, on the Investor Relations section of its website at ir.bluegreenvacations.com. A transcript will also be available simultaneously with the webcast. 

The webcast and supplemental management presentation can be accessed on the Investor Relations section of Bluegreen Vacations’ website at ir.bluegreenvacations.com. The pre-record can also be accessed at 1-844-512-2921 (domestic) and 1-412-317-6671 (international) and entering pin number 24463164. The business update via dial-in will be available through midnight December 5, 2018. A transcript will also be available simultaneously with the webcast.



Forward-Looking Statements:

Certain statements in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, are forward-looking statements.  Forward-looking statements are based on current expectations of management and can be identified by the use of words such as “believe”, “may”,

 

 


 

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“could”, “should”, “plans”, “anticipates”, “intends”, “estimates”, “expects”, and other words and phrases of similar impact.  Forward-looking statements involve risks, uncertainties and other factors, many of which are beyond our control, that may cause actual results or performance to differ from those set forth or implied in the forward-looking statements. These risks and uncertainties include, without limitation, risks relating to our ability to successfully implement our strategic plans and initiatives, generate earnings and long-term growth, risks relating to improving our digital capabilities, including our virtual reality technology, successfully complete acquisitions and sales office expansions when planned or at all and that such acquisitions and expansions will be profitable, that marketing alliances will remain in place and will successfully  drive growth or be successful, the risk that the impact of the hurricane may be materially different than estimated and we may not have achieved the assumed sales, and the additional risks and uncertainties described in Bluegreen's filings with the Securities and Exchange Commission, including, without limitation, those described in the “Risk Factors” section of Bluegreen’s Annual Report on Form 10-K for the year ended December 31, 2017 and Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2018, expected to be filed on or about November 6, 2018.  Bluegreen cautions that the foregoing factors are not exclusive. You should not place undue reliance on any forward-looking statement, which speaks only as of the date made. Bluegreen does not undertake, and specifically disclaims any obligation, to update or supplement any forward-looking statements.



Non-GAAP Financial Measures:

The Company refers to certain non-GAAP financial measures in this press release, including system-wide sales of VOIs, Adjusted EBITDA, adjusted EPS and free cash flow.  Please see the supplemental tables and definitions attached herein for additional information and reconciliation of such non-GAAP financial measures.


About Bluegreen Vacations Corporation: 

Bluegreen Vacations Corporation (NYSE: BXG) is a leading vacation ownership company that markets and sells vacation ownership interests (VOIs) and manages resorts in top leisure and urban destinations. The Bluegreen Vacation Club is a flexible, points-based, deeded vacation ownership plan with approximately 216,000 owners, 69 Club and Club Associate Resorts and access to more than 11,100 other hotels and resorts through partnerships and exchange networks as of September 30, 2018. Bluegreen Vacations also offers a portfolio of comprehensive, fee-based resort management, financial, and sales and marketing services, to or on behalf of third parties. Bluegreen is 90% owned by BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB), a diversified holding company. For further information, visit www.BluegreenVacations.com.





About BBX Capital Corporation:

BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB), is a Florida-based diversified holding company whose activities include its 90% ownership interest in Bluegreen Vacations Corporation (NYSE: BXG) as well as its real estate and middle market divisions. For additional information, please visit www.BBXCapital.com



Contact:
Bluegreen Vacations Corporation
Investor Relations:
Nikki Sacks, 203-682-8263
or
Evelyn Infurna, 203-682-8265
Email: bluegreenvac@icrinc.com



 

 


 

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BLUEGREEN VACATIONS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME (UNAUDITED)

(In thousands, except for per share data)







 

 

 

 

 

 

 

 

 

 

 

 

 



 

For the Three Months Ended

 

For the Nine Months Ended

 



 

September 30,

 

September 30,

 



 

 

 

 

2017

 

 

 

 

2017

 



 

2018

 

*As Adjusted

 

2018

 

*As Adjusted

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross sales of VOIs

 

$

85,151 

 

$

73,402 

 

$

231,338 

 

$

209,585 

 

Estimated uncollectible VOI notes receivable

 

 

(14,453)

 

 

(10,949)

 

 

(35,926)

 

 

(33,491)

 

Sales of VOIs

 

 

70,698 

 

 

62,453 

 

 

195,412 

 

 

176,094 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

Fee-based sales commission revenue

 

 

61,641 

 

 

69,977 

 

 

167,581 

 

 

179,046 

 

Other fee-based services revenue

 

 

31,057 

 

 

27,386 

 

 

89,472 

 

 

83,442 

 

Cost reimbursements

 

 

16,900 

 

 

14,097 

 

 

47,157 

 

 

40,660 

 

Interest income

 

 

21,531 

 

 

21,296 

 

 

63,771 

 

 

65,673 

 

Other income, net

 

 

378 

 

 

 —

 

 

1,269 

 

 

 —

 

Total revenues

 

 

202,205 

 

 

195,209 

 

 

564,662 

 

 

544,915 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of VOIs sold

 

 

11,237 

 

 

6,444 

 

 

19,838 

 

 

11,352 

 

Cost of other fee-based services

 

 

19,937 

 

 

17,182 

 

 

53,983 

 

 

48,663 

 

Cost reimbursements

 

 

16,900 

 

 

14,097 

 

 

47,157 

 

 

40,660 

 

Selling, general and administrative expenses

 

 

112,407 

 

 

114,934 

 

 

315,535 

 

 

312,257 

 

Interest expense

 

 

9,208 

 

 

8,058 

 

 

25,470 

 

 

23,779 

 

Other expense, net

 

 

 —

 

 

119 

 

 

 —

 

 

120 

 

Total costs and expenses

 

 

169,689 

 

 

160,834 

 

 

461,983 

 

 

436,831 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

Income before non-controlling interest and

 

 

 

 

 

 

 

 

 

 

 

 

 

  provision for income taxes

 

 

32,516 

 

 

34,375 

 

 

102,679 

 

 

108,084 

 

Provision for income taxes

 

 

8,443 

 

 

12,584 

 

 

24,997 

 

 

38,487 

 

Net income

 

 

24,073 

 

 

21,791 

 

 

77,682 

 

 

69,597 

 

Less: Net income attributable to
  non-controlling interest

 

 

3,585 

 

 

3,251 

 

 

9,509 

 

 

9,418 

 

Net income attributable to Bluegreen

 

 

 

 

 

 

 

 

 

 

 

 

 

 Vacations Corporation shareholders

 

$

20,488 

 

$

18,540 

 

$

68,173 

 

$

60,179 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income attributable to

 

 

 

 

 

 

 

 

 

 

 

 

 

 Bluegreen Vacations Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 

 shareholders

 

$

20,488 

 

$

18,540 

 

$

68,173 

 

$

60,179 

 



 

 

 

 

 

 

 

 

 

 

 

 

 



*See Note 2: Significant Accounting Policies within the September 30, 2018 quarterly report on Form 10-Q for further discussion.

 

 


 

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BLUEGREEN VACATIONS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME (UNAUDITED)

(In thousands, except for per share data)









 

 

 

 

 

 

 

 

 

 

 

 

 



 

For the Three Months Ended

 

For the Nine Months Ended

 



 

September 30,

 

September 30,

 



 

 

 

 

2017

 

 

 

 

2017

 



 

2018

 

*As Adjusted

 

2018

 

*As Adjusted

 

Earnings per share attributable to
  Bluegreen Vacations Corporation
  shareholders - Basic and diluted

 

$

0.27 

 

$

0.26 

(1)

$

0.91 

 

$

0.85 

(1)



 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares
  outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

74,734 

 

 

70,998 

(1)

 

74,734 

 

 

70,998 

(1)



 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.15 

 

$

0.28 

(1)

$

0.45 

 

$

0.56 

(1)





*See Note 2: Significant Accounting Policies within the September 30, 2018 quarterly report on Form 10-Q for further discussion.



(1)

The calculation of basic and diluted earnings per share and the cash dividend for the 2017 periods reflect the stock split effected in connection with our initial public offering during November 2017 as if the stock split was effected January 1, 2017. See Note 1: Organization and Basis of Presentation within the September 30, 2018 quarterly report on Form 10-Q for further discussion.

 

 


 

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BLUEGREEN VACATIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)

(In thousands)









 

 

 

 

 

 



 

For the Nine Months Ended



 

September 30,



 

2018

 

2017



 

 

 

 

*As Adjusted

Operating activities:

 

 

 

 

 

 

Net income

 

$

77,682 

 

$

69,597 

Adjustments to reconcile net income to net cash provided

 

 

 

 

 

 

by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

11,852 

 

 

10,559 

Loss on disposal of property and equipment

 

 

 —

 

 

428 

Provision for loan losses

 

 

35,866 

 

 

32,066 

Provision (benefit) for deferred income taxes

 

 

2,730 

 

 

(5,669)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Notes receivable

 

 

(48,492)

 

 

(29,526)

Prepaid expenses and other assets

 

 

(23,386)

 

 

(17,736)

Inventory

 

 

(23,405)

 

 

(30,707)

Accounts payable, accrued liabilities and other, and

 

 

 

 

 

 

deferred income

 

 

12,895 

 

 

19,677 

Net cash provided by operating activities

 

 

45,742 

 

 

48,689 



 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(24,347)

 

 

(9,380)

Net cash used in investing activities

 

 

(24,347)

 

 

(9,380)



 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

Proceeds from borrowings collateralized

 

 

 

 

 

 

by notes receivable

 

 

114,756 

 

 

170,030 

Payments on borrowings collateralized by notes receivable

 

 

(103,578)

 

 

(164,331)

Proceeds from borrowings collateralized

 

 

 

 

 

 

by line-of-credit facilities and notes payable

 

 

50,042 

 

 

30,000 

Payments under line-of-credit facilities and notes payable

 

 

(36,717)

 

 

(32,968)

Payments of debt issuance costs

 

 

(385)

 

 

(3,217)

Distributions to non-controlling interest

 

 

(4,900)

 

 

(3,920)

Dividends paid

 

 

(33,631)

 

 

(40,000)

Net cash used in financing activities

 

 

(14,413)

 

 

(44,406)

Net increase (decrease) in cash and cash equivalents

 

 

 

 

 

 

and restricted cash

 

 

6,982 

 

 

(5,097)

Cash, cash equivalents and restricted cash at beginning of period

 

 

243,349 

 

 

190,228 

Cash, cash equivalents and restricted cash at end of period

 

$

250,331 

 

$

185,131 



 

 

 

 

 

 

Supplemental schedule of operating cash flow information:

 

 

 

 

 

 

Interest paid, net of amounts capitalized

 

$

22,437 

 

$

19,715 

Income taxes paid

 

$

22,856 

 

$

41,087 

Supplemental schedule of non-cash investing and financing activities:

 

 

 

 

 

 

Acquisition of inventory, property, and equipment for notes payable

 

$

24,258 

 

$

 —



*See Note 2: Significant Accounting Policies within the September 30, 2018 quarterly report on Form 10-Q for further discussion.

 

 


 

Picture 4

 





BLUEGREEN VACATIONS CORPORATION

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except for per share data)







 

 

 

 

 

 



 

September 30,

 

December 31,



 

2018

 

2017



 

 

 

*As Adjusted

ASSETS 

 

 

 

 

 

 

Cash and cash equivalents

 

$

195,439 

 

$

197,337 

Restricted cash ($17,081 and $19,488 in VIEs at September 30, 2018

 

 

 

 

 

 

and December 31, 2017, respectively)

 

 

54,892 

 

 

46,012 

Notes receivable, net ($308,221 and $279,188 in VIEs

 

 

 

 

 

 

at September 30, 2018 and December 31, 2017, respectively)

 

 

439,484 

 

 

426,858 

Inventory

 

 

325,532 

 

 

281,291 

Prepaid expenses

 

 

15,733 

 

 

10,743 

Other assets

 

 

70,498 

 

 

52,506 

Intangible assets, net

 

 

61,878 

 

 

61,978 

Loan to related party

 

 

80,000 

 

 

80,000 

Property and equipment, net

 

 

93,536 

 

 

74,756 

Total assets

 

$

1,336,992 

 

$

1,231,481 



 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Accounts payable

 

$

19,822 

 

$

22,955 

Accrued liabilities and other

 

 

94,729 

 

 

77,317 

Deferred income

 

 

15,509 

 

 

16,893 

Deferred income taxes

 

 

91,696 

 

 

88,966 

Receivable-backed notes payable - recourse

 

 

97,770 

 

 

84,697 

Receivable-backed notes payable - non-recourse (in VIEs)

 

 

335,680 

 

 

336,421 

Lines-of-credit and notes payable

 

 

137,834 

 

 

100,194 

Junior subordinated debentures

 

 

71,147 

 

 

70,384 

Total liabilities

 

 

864,187 

 

 

797,827 



 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 



 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

 

Common stock, $.01 par value, 100,000,000 shares authorized; 74,734,455

 

 

 

 

 

 

shares issued and outstanding at September 30, 2018 and December 31, 2017

 

 

747 

 

 

747 

Additional paid-in capital

 

 

274,366 

 

 

274,366 

Retained earnings

 

 

150,062 

 

 

115,520 

Total Bluegreen Vacations Corporation shareholders' equity

 

 

425,175 

 

 

390,633 

Non-controlling interest

 

 

47,630 

 

 

43,021 

Total shareholders' equity

 

 

472,805 

 

 

433,654 

Total liabilities and shareholders' equity

 

$

1,336,992 

 

$

1,231,481 



*See Note 2: Significant Accounting Policies within the September 30, 2018 quarterly report on Form 10-Q for further discussion.

 

 


 

Picture 4

 



BLUEGREEN VACATIONS CORPORATION

ADJUSTED EBITDA RECONCILIATION







 

 

 

 

 

 

 

 

 

 

 

 



 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,

(in thousands)

 

2018

 

2017

 

2018

 

2017

Net income attributable to shareholders

 

$

20,488 

 

$

18,540 

 

$

68,173 

 

$

60,179 

Net income attributable to the
  non-controlling interest in
  Bluegreen/Big Cedar Vacations

 

 

3,585 

 

 

3,251 

 

 

9,509 

 

 

9,418 

Adjusted EBITDA attributable to the
  non-controlling interest
  in Bluegreen/Big Cedar Vacations

 

 

(3,637)

 

 

(3,209)

 

 

(9,521)

 

 

(9,183)

Loss on assets held for sale

 

 

18 

 

 

 

 

 

 

44 

Add: depreciation and amortization

 

 

3,169 

 

 

2,420 

 

 

9,087 

 

 

7,089 

Less: interest income (other than interest
  earned on VOI notes receivable)

 

 

(1,407)

 

 

(1,292)

 

 

(4,222)

 

 

(5,487)

Add: interest expense - corporate and other

 

 

4,207 

 

 

3,544 

 

 

11,136 

 

 

10,415 

Add: franchise taxes

 

 

56 

 

 

72 

 

 

180 

 

 

127 

Add: provision for income taxes

 

 

8,443 

 

 

12,584 

 

 

24,997 

 

 

38,487 

Corporate realignment cost

 

 

 —

 

 

3,216 

 

 

751 

 

 

3,679 

Total Adjusted EBITDA

 

$

34,922 

 

$

39,130 

 

$

110,099 

 

$

114,768 



 

 


 

Picture 4

 

BLUEGREEN VACATIONS CORPORATION

SEGMENT ADJUSTED EBITDA SUMMARY





 

 

 

 

 

 

 

 

 

 

 

 



 

For the Three Months Ended September 30,

 

For the Nine Months Ended September 30,

(in thousands)

 

2018

 

2017

 

2018

 

2017

Adjusted EBITDA - sales of VOIs   and financing

 

$

44,927 

 

$

48,766 

 

$

136,908 

 

$

137,136 

Adjusted EBITDA - resort operations   and club management

 

 

12,214 

 

 

10,294 

 

 

38,041 

 

 

31,928 

Total Segment Adjusted EBITDA

 

 

57,141 

 

 

59,060 

 

 

174,949 

 

 

169,064 

Less: Corporate and other

 

 

(22,219)

 

 

(19,930)

 

 

(64,850)

 

 

(54,296)

Total Adjusted EBITDA

 

$

34,922 

 

$

39,130 

 

$

110,099 

 

$

114,768 





 

 


 

Picture 4

 

BLUEGREEN VACATIONS CORPORATION

SALES OF VOIs AND FINANCING SEGMENT- ADJUSTED EBITDA





 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 



 

For the Three Months Ended September 30,



 

2018

 

2017

 

 

Amount

 

% of
System-
wide sales
of VOIs (5)

 

Amount

 

% of
System-
wide sales
of VOIs (5)

(in thousands)

 

 

 

 

 

 

 

 

 

 

Developed VOI sales (1)

 

$

90,596 

 

52%

 

$

77,907 

 

45%

Secondary Market sales

 

 

54,300 

 

31

 

 

38,732 

 

24

Fee-Based sales

 

 

88,155 

 

51

 

 

97,963 

 

57

JIT sales

 

 

13,591 

 

8

 

 

14,306 

 

8

Less: Equity trade allowances (6)

 

 

(73,336)

 

(42)

 

 

(57,543)

 

(34)

System-wide sales of VOIs

 

 

173,306 

 

100%

 

 

171,365 

 

100%

Less: Fee-Based sales

 

 

(88,155)

 

(51)

 

 

(97,963)

 

(57)

Gross sales of VOIs

 

 

85,151 

 

49

 

 

73,402 

 

43

Provision for loan losses (2)

 

 

(14,453)

 

(17)

 

 

(10,949)

 

(15)

Sales of VOIs

 

 

70,698 

 

41

 

 

62,453 

 

36

Cost of VOIs sold (3)

 

 

(11,237)

 

(16)

 

 

(6,444)

 

(10)

Gross profit (3)

 

 

59,461 

 

84

 

 

56,009 

 

90

Fee-Based sales commission revenue (4)

 

 

61,641 

 

70

 

 

69,977 

 

71

Financing revenue, net of financing expense

 

 

15,043 

 

9

 

 

15,401 

 

9

Other fee-based services - title operations, net

 

 

2,264 

 

1

 

 

1,121 

 

1

Net carrying cost of VOI inventory

 

 

(2,908)

 

(2)

 

 

(837)

 

0

Selling and marketing expenses

 

 

(84,955)

 

(49)

 

 

(88,116)

 

(51)

General and administrative expenses - sales and
  marketing

 

 

(7,225)

 

(4)

 

 

(9,462)

 

(6)

Operating profit - sales of VOIs and financing

 

 

43,321 

 

25%

 

 

44,093 

 

26%

Add: Depreciation

 

 

1,606 

 

 

 

 

1,586 

 

 

Add: Corporate Realignment Cost

 

 

 —

 

 

 

 

3,087 

 

 

Adjusted EBITDA - sales of VOI and financing

 

$

44,927 

 

 

 

$

48,766 

 

 





 

 


 

Picture 4

 

BLUEGREEN VACATIONS CORPORATION

SALES OF VOIs AND FINANCING SEGMENT- ADJUSTED EBITDA

 







 

 

 

 

 

 

 

 

 

 



 

For the Nine Months Ended September 30,



 

2018

 

2017



 

Amount

 

% of
System-
wide sales
of VOIs (5)

 

Amount

 

% of
System-
wide sales
of VOIs (5)

(in thousands)

 

 

 

 

 

 

 

 

 

 

Developed VOI sales (1)

 

$

218,842 

 

46%

 

$

216,451 

 

46%

Secondary Market sales

 

 

185,847 

 

38

 

 

117,711 

 

26

Fee-Based sales

 

 

246,773 

 

52

 

 

257,756 

 

55

JIT sales

 

 

32,274 

 

7

 

 

37,374 

 

8

Less: Equity trade allowances (6)

 

 

(205,625)

 

(43)

 

 

(161,951)

 

(35)

System-wide sales of VOIs

 

 

478,111 

 

100%

 

 

467,341 

 

100%

Less: Fee-Based sales

 

 

(246,773)

 

(52)

 

 

(257,756)

 

(55)

Gross sales of VOIs

 

 

231,338 

 

48

 

 

209,585 

 

45

Provision for loan losses (2)

 

 

(35,926)

 

(16)

 

 

(33,491)

 

(16)

Sales of VOIs

 

 

195,412 

 

41

 

 

176,094 

 

38

Cost of VOIs sold (3)

 

 

(19,838)

 

(10)

 

 

(11,352)

 

(6)

Gross profit (3)

 

 

175,574 

 

90

 

 

164,742 

 

94

Fee-Based sales commission revenue (4)

 

 

167,581 

 

68

 

 

179,046 

 

69

Financing revenue, net of financing expense

 

 

44,965 

 

9

 

 

46,232 

 

10

Other fee-based services - title operations, net

 

 

5,771 

 

1

 

 

7,249 

 

2

Net carrying cost of VOI inventory

 

 

(7,075)

 

(1)

 

 

(3,219)

 

(1)

Selling and marketing expenses

 

 

(233,961)

 

(49)

 

 

(242,040)

 

(52)

General and administrative expenses - sales and
  marketing

 

 

(20,869)

 

(4)

 

 

(22,561)

 

(5)

Operating profit - sales of VOIs and financing

 

 

131,986 

 

28%

 

 

129,449 

 

28%

Add: Depreciation

 

 

4,922 

 

 

 

 

4,600 

 

 

Add: Corporate Realignment Cost

 

 

 —

 

 

 

 

3,087 

 

 

Adjusted EBITDA - sales of VOIs and financing

 

$

136,908 

 

 

 

$

137,136 

 

 



(1)

Developed VOI sales represent sales of VOIs acquired or developed by us under our developed VOI business. Developed VOI sales do not include Secondary Market sales, Fee-Based sales or JIT sales.

(2)

Provision for loan losses is calculated as a percentage of gross sales of VOIs, which excludes Fee-Based sales (and not of system-wide sales of VOIs).

(3)

Percentages for costs of VOIs sold and gross profit are calculated as a percentage of sales of VOIs (and not of system-wide sales of VOIs).

(4)

Percentages for Fee-Based sales commission revenue are calculated as a percentage of Fee-Based sales (and not of system-wide sales of VOIs).

(5)

Represents the applicable line item, calculated as a percentage of system-wide sales of VOIs, unless otherwise indicated in the above footnotes.

(6)

Equity trade allowances are amounts granted to customers upon trading in their existing VOIs in connection with the purchase of additional VOIs.





 

 


 

Picture 4

 

BLUEGREEN VACATIONS CORPORATION

SALES OF VOIs AND FINANCING SEGMENT

SALES AND MARKETING DATA





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,



 

2018

 

2017

 

% Change

 

2018

 

2017

 

% Change



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of sales offices at period-end

 

 

25 

 

 

23 

 

 

 

25 

 

 

23 

 

Number of active sales arrangements
  with third-party clients at period-end

 

 

15 

 

 

14 

 

 

 

15 

 

 

14 

 

Total number of VOI sales transactions

 

 

10,955 

 

 

11,598 

 

(6)

 

 

30,959 

 

 

30,638 

 

Average sales price per transaction

 

$

15,988 

 

$

15,055 

 

 

$