Picture 4

 

BLUEGREEN VACATIONS CORPORATION REPORTS FINANCIAL RESULTS FOR THE THIRD QUARTER 2020 



BOCA RATON, Florida (November 9,  2020) – Bluegreen Vacations Corporation (NYSE: BXG) ("Bluegreen" or the “Company") reported today its financial results for the quarter ended September 30, 2020.  



Third Quarter 2020 Highlights:



·

Net income attributable to shareholders was $9.9 million in the current year quarter compared to $20.3 million in the prior year quarter



·

Earnings Per Share (“EPS”) was $0.14 in the current year quarter, compared to $0.27 in the prior year quarter.  

·

Adjusted EBITDA attributable to shareholders decreased to $22.4 million in the current year quarter, compared to $37.0 million in the prior year quarter.

·

Total revenue decreased to $144.6 million in the current year quarter from $202.7 million in the prior year quarter

·

System-wide sales of vacation ownership interests (“VOIs”) decreased to $104.3 million in the current year quarter from $170.4 million in the prior year quarter    

·

The current year quarter’s results were adversely affected by the economic impact of the COVID-19 pandemic. In response to the pandemic, we temporarily closed all of our VOI sales centers in the last week of March 2020.  By September 30, 2020, we recommenced our marketing operations at 92 Bass Pro Shops and Cabela’s stores, reactivated our Choice Hotels call transfer program, reopened all of our resorts, and reopened all but one of our VOI sales centers.  Resort occupancy for the third quarter of 2020 was approximately 70%.

·

Completed a private offering and sale of approximately $131.0 million of VOI receivable-backed Notes in October 2020.



Alan B. Levan, Chairman, President and Chief Executive Officer of Bluegreen, commented, “After our growth had essentially stalled in the periods prior to and including the third quarter of 2019, we launched our “Bluegreen Renewal” initiative, with the internal goals of revitalizing our sales and revenue growth and better managing our expenses. We reorganized our team and put in place processes which we believed would help us achieve operational improvements quickly.  We were encouraged by the results of our efforts which included an upward trend in system-wide sales, achieving 6.5% growth in the fourth quarter of 2019 and 16.5% growth in system-wide sales through February 29, 2020, compared to the comparable prior year periodUnfortunately, in March 2020 the United States began to experience the impacts of the unprecedented COVID-19 pandemic, which resulted in significant declines in our occupancy and guest tours and closures of several of our resorts and all of our sales and marketing operations.   Our response to the pandemic required us to prudently change our focus from pursuing growth to dramatically reducing expenses during the crisis and bolstering our liquidity, both of which we did immediately.” 



Mr. Levan continued, “Beginning in the second quarter of 2020 and continuing in the third quarter, our focus has been on safely reopening our resorts and our sales and marketing operations.    In that regard, we are pleased with the pace of the rebound in our third quarter system-wide sales of VOIs, which at $104.3 million were just 39% below the third quarter of 2019, despite the continued impact of the COVID-19 pandemic.  Further, the Company returned to profitability in the third quarter, generating $22.4 million in consolidated adjusted EBITDA attributable to shareholders and $9.9 million in net income attributable to shareholders.  It is our hope that, if conditions allow, we will soon be able to return to the upward trend in sales and increased profitability that we believe the Bluegreen Renewal initiative will deliver. However, it goes without saying that this continues to be an unprecedented event in the United States, and it is currently impossible to predict the duration or severity of the pandemic or if and when the economy and our business will return to pre-pandemic levels.  In the meantime, I would like to thank our owners, guests and shareholders for their continued support, as well as our management team and associates for their continued

 

 


 

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excellence in delivering fun and safe vacations and supporting the Company’s initiatives during these challenging times.”

 

Financial Results 

(dollars in millions, except per share data)





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 



2020

 

2019

 

Change

 

2020

 

2019

 

Change



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

144.6 

 

$

202.7 

 

(28.7)

%

 

$

370.0 

 

$

560.5 

 

(34.0)

%

Income before non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  and provision for income taxes

$

17.4 

 

$

30.4 

 

(42.7)

%

 

$

6.4 

 

$

42.5 

 

(85.0)

%

Net income attributable to shareholders

$

9.9 

 

$

20.3 

 

(51.3)

%

 

$

1.3 

 

$

24.3 

 

(94.8)

%

Earnings per share basic and diluted

$

0.14 

 

$

0.27 

 

(48.1)

%

 

$

0.02 

 

$

0.33 

 

(93.9)

%

Adjusted EBITDA attributable to
shareholders(1)

$

22.4 

 

$

37.0 

 

(39.5)

%

 

$

29.3 

 

$

91.8 

 

(68.1)

%

Capital-light revenue(2) as a percentage of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total revenue

 

66.7% 

 

 

70.2% 

 

(350)

bp

 

 

70.1% 

 

 

76.3% 

 

(620)

bp



(1)

See Appendix for reconciliation of Adjusted EBITDA Attributable to Shareholders to Net Income Attributable to Shareholders

(2)

Bluegreen's "capital-light" revenue includes revenue from 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.



Adjusted EBITDA was $22.4 million, including $27.3 million generated from the Sales of VOIs and Financing Segment and $15.4 million produced by the Resort Operations and Club Management segment, partially offset by $20.4 million spent on corporate overhead and other expenses.   Please see discussion of Segment Results below for further information.



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,

 



2020

 

2019

 

Change

 

2020

 

2019

 

Change



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

System-wide sales of VOIs

$

104.3 

 

$

170.4 

 

(38.8)

%

 

$

254.8 

 

$

463.6 

 

(45.0)

%

Segment adjusted EBITDA

$

27.3 

 

$

41.6 

 

(34.3)

%

 

$

24.4 

 

$

107.2 

 

(77.2)

%

Sales offices

 

25 

 

 

26 

 

(3.8)

%

 

 

25 

 

 

26 

 

(3.8)

%

Sales offices selling to new prospects

 

18 

 

 

19 

 

(5.3)

%

 

 

18 

 

 

19 

 

(5.3)

%

Guest tours

 

36,268 

 

 

65,875 

 

(44.9)

%

 

 

83,022 

 

 

179,180 

 

(53.7)

%

Average sales price per transaction

$

17,094 

 

$

14,799 

 

15.5 

%

 

$

16,324 

 

$

15,290 

 

6.8 

%

Sale to tour conversion ratio

 

16.9% 

 

 

17.6% 

 

(70)

bp

 

 

18.9% 

 

 

17.0% 

 

190 

bp

Sales volume per guest ("VPG")

$

2,889 

 

$

2,609 

 

10.7 

%

 

$

3,079 

 

$

2,605 

 

18.2 

%

Number of Bass Pro and Cabela's

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

marketing locations

 

92 

 

 

75 

 

22.7 

%

 

 

92 

 

 

75 

 

22.7 

%

Financing revenue, net of financing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

expense

$

15,545 

 

$

15,008 

 

3.6 

%

 

$

46,658 

 

$

45,101 

 

3.5 

%

Selling and marketing expenses, as a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of system-wide sales of VOIs

 

51.4% 

 

 

51.8% 

 

(40)

bp

 

 

61.1% 

 

 

51.4% 

 

970 

bp

Provision for loan losses

 

16.7% 

 

 

19.8% 

 

(310)

bp

 

 

28.0% 

 

 

17.5% 

 

1,050 

bp

Cost of VOIs sold

 

6.1% 

 

 

4.7% 

 

140 

bp

 

 

7.7% 

 

 

9.4% 

 

(170)

bp



 

 


 

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System-wide sales of VOIs

System-wide sales of VOIs were $104.3 million during the three months ended September 30, 2020.   As discussed above, all of the Company’s VOI sales centers were temporarily closed on March 23, 2020 and remained closed until June 2020, when 21 of the Company’s 26 VOI sales centers were re-opened for sales to existing owners with one of these sales centers also selling to new prospectsDuring the third quarter of 2020, we reopened all but one of our VOI sales centers. 



As a result, the sales mix for the third quarter of 2020 was heavily weighted toward sales to existing owners at 67% of system-wide sales of VOIs.

  

Fee-based sales commission revenue

Fee-based sales commission revenue was $22.1 million and was 67% of third-party VOI sales during the current year quarter.  Third-party VOI sales were 32% of system-wide sales during the current year quarter, which is lower than is typical. Third-party VOI sales tend to occur more often at sales centers selling to new prospects, which were more significantly impacted by the COVID-19 pandemic.



Financing Revenue, net of Financing Expense

Interest income on VOI notes receivable decreased 5.0% to $19.0 million in the third quarter of 2020 compared to the third quarter of 2019, driven by lower notes receivable balances primarily due to the temporary closure of VOI sales centers as a result of the COVID-19 pandemic.  Interest expense on receivable-backed notes payable decreased 22.8% to $3.9 million in the third quarter of 2020 compared to the third quarter of 2019, primarily due to lower outstanding receivable-backed debt balances and lower weighted-average cost of borrowings due to lower market interest rates.



Cost of VOIs sold

In the third quarter of 2020, cost of VOIs sold represented 6% of sales of VOIs compared to 5% in the third quarter of 2019. 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 and the size of the point packages of the VOIs sold.

 

Provision for Loan Losses

The provision for loan losses varies based on the amount of financed, non fee-based sales during the period and changes in our estimates of future notes receivable performance for existing and newly originated loans. The provision for loan losses as a percentage of gross sales of VOIs was 17% during the current year quarter compared to 20% during the prior year quarter.



The provision for new loans generated during the third quarter of 2020 was 24%, which was consistent with the prior year quarter.  However, the percentage of VOI sales that were financed during the third quarter was 59%, compared to 60% in the prior year quarter, which resulted in an overall lower provision as a percentage of sales in the 2020 period.  Additionally, in the first quarter of 2020, the Company recorded an additional allowance for loan losses of $12.0 million, which included its estimate of customer defaults expected as a result of the COVID–19 pandemic. The Company attempted to provide assistance with mortgages on a case-by-case basis with a view to mitigating defaults, however there is no assurance that these efforts will be successful or that the allowances for loan losses will prove to be adequate.



The Company continues to monitor and address the activity of so-called third-party timeshare exit firms.  Certain firms have increased their activities during the COVID-19 pandemic and the Company will continue to consider appropriate courses of action regarding this industry-wide issue. 



Net Carrying Cost of Inventory

Net carrying cost of inventory increased $2.7 million or 46% in the third quarter of 2020 compared to the third quarter of 2019, primarily due to decreased rentals of developer inventory and decreased sampler stays due to decreased travel associated with the COVID-19 pandemic and increased maintenance fees and developer subsidies associated with our increase in VOI inventory as a result of reduced sales during the period.



 

 


 

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Selling and Marketing Expense

Selling and marketing expense were 51% of system-wide sales of VOIs during the current year quarter as compared to 52% during the prior year.  The Company believes that its cost mitigation efforts during this period of reduced sales, as well as a higher proportion of sales to owners in the third quarter of 2020, helped maintain this percentage at historical levels.  As of September 30, 2020, the Company had recommenced marketing operations at 87 Bass Pro and Cabela’s locations and marketing operations commenced at 5 new Cabela’s stores.  These stores sell vacation packages to drive marketing guests to its sales offices in the future.  In addition, the Company had restarted its call transfer marketing program with Choice Hotels, although volumes of packages sold continue to be adversely impacted by the COVID-19 pandemic. Additionally, in October 2020, the Company reopened marketing operations at one additional Bass Pro Shop that was open in March 2020 prior to the pandemic and commenced marketing operations at 4 new Cabela’s stores for a total of 97 Bass Pro Shops and Cabela’s stores



General and Administrative Expense

General and Administrative Expense related to the Company’s sales and marketing operations decreased $1.6 million or 21% as compared to the third quarter of 2019, primarily due to the Company’s cost mitigation efforts during this period of reduced sales.



Resort Operations and Club Management Segment 

(dollars in millions)





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Three Months Ended September 30,

 

Nine Months Ended September 30,



2020

 

2019

 

% Change

 

2020

 

2019

 

% Change



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Resort operations and club management revenue

$

42.2 

 

$

47.3 

 

(10.8)

%

 

$

124.9 

 

$

132.9 

 

(6.0)

%

Segment adjusted EBITDA

$

15.4 

 

$

15.5 

 

(0.5)

%

 

$

49.4 

 

$

45.0 

 

9.9 

%

Resorts managed

 

49 

 

 

49 

 

 —

%

 

 

49 

 

 

49 

 

 —

%



In the third quarter of 2020, resort operations and management club revenue decreased by $5.1 million, or 11%, to $42.2 million from $47.3 million in the prior year quarter, in part due to a decrease in cost reimbursement revenue, which has no impact on segment adjusted EBITDA.  Net of cost reimbursement revenue, resort operations and club management revenues decreased 10% as a result of decreases in revenues from our Traveler Plus program, other owner programs, resort retail operations and third-party rental commissions largely, we believe, as a result of the COVID-19 pandemic. However, segment adjusted EBITDA was relatively flat at $15.4 million and $15.5 million, respectively,  driven primarily by lower costs incurred during the third quarter of 2020 due to cost mitigation activities implemented in the first quarter of 2020 and lower Traveler Plus program costs, other owner programs and costs of resort retail operations.   Resort occupancy for the third quarter of 2020 was approximately 70%.



Corporate and Other 



Adjusted EBITDA related to Corporate and Other was relatively flat at $20.4 million and $20.1 million in the third quarter of 2020 and 2019, respectively. Further, Corporate General and Administrative expenses decreased $1.9 million primarily due to cost mitigation steps implemented in the first quarter of 2020.



Balance Sheet and Liquidity



As of September 30, 2020, unrestricted cash and cash equivalents totaled $193.1 million.  Excluding receivable-backed notes payable, the Company’s net debt-to-EBITDA ratio as of September 30, 2020 was 0.68.



The Company had availability of approximately $182 million under its receivable-backed purchase and credit facilities, and corporate credit line as of September 30, 2020, subject to eligible collateral and the terms of the facilities, as applicable. During the third quarter of 2020, the Company repaid $60.0 million drawn down under our line-of credit in March 2020 as a precautionary measure to provide the Company liquidity due to COVID-19. Further, in October 2020, the Company completed a private offering and sale of approximately $131.0 million of VOI receivable-backed

 

 


 

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Notes (the "2020-A Term Securitization").  As a result of the 2020-A Term Securitization, availability under the Company’s receivable-backed purchase and credit facilities and corporate credit line increased $82.1 million as of October 8, 2020, subject to eligible collateral and the terms of the facilities, as applicable. 

Free cash flow, which the Company defines as cash flow from operating activities, less capital expenditures, was $46.1 million for the nine months ended September 30, 2020, compared to $31.8 million for the nine months ended September 30, 2019. The increase in free cash flow was primarily due to a decrease in the settlement payments made to Bass Pro pursuant to the agreement entered into in June 2019.  The Company paid Bass Pro a $20.0 million initial settlement payment in June 2019, as compared to a $4.0 million settlement installment payment made to Bass Pro in January 2020.  In addition, income tax payments decreased $14.8 million, spending on the acquisition and development of inventory decreased $17.2 million and the purchase of property and equipment decreased $12.6 million during the 2020 period as compared to the 2019 period.  These increases in free cash flow were partially offset by lower cash sales and down payments from customers associated with the closure of VOI sales centers in response to the COVID-19 pandemic.  



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 attributable to shareholders 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 and manages resorts in popular leisure and urban destinations. The Bluegreen Vacation Club is a flexible, points-based, deeded vacation ownership plan with 68 Club and Club Associate Resorts and access to nearly 11,300 other hotels and resorts through partnerships and exchange networks. 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 Vacations Corporation is approximately 93% owned by Bluegreen Vacations Holding Corporation (NYSE: BVH) (OTCQX: BVHBB) (formerly BBX Capital Corporation), a Florida-based holding company.  For further information about Bluegreen Vacations Corporation, please visit www.BluegreenVacations.com.



About Bluegreen Vacations Holding Corporation: Bluegreen Vacations Holding Corporation (NYSE: BVH) (OTCQX: BVHBB) (formerly BBX Capital Corporation), is a Florida-based holding company whose sole investment is its approximate 93% ownership interest of Bluegreen Vacations Corporation (NYSE: BXG).  For further information, please visit www.BVHcorp.com.

Bluegreen Vacations Corporation Contact

Investor Relations: Leo Hinkley, Managing Director, Investor Relations Officer

Telephone: 954-940-5336  Email: Leo.Hinkley@BluegreenVacations.com



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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”, “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 public health issues, including in particular the COVID-19 pandemic and the effects of the pandemic, including resort closures, travel and business restrictions, volatility in the international and national economy and credit markets, worker absenteeism, quarantines and other health related restrictions; the length and severity of the COVID-19 pandemic and our ability to successfully resume full business operations thereafter; governmental and agency orders, mandates and guidance in response to the COVID-19 pandemic and the duration thereof, which is uncertain and will impact our ability to fully utilize resorts and re-open sales centers and other marketing activities; the pace of recovery following the COVID-19 pandemic; the risk that resorts and sales operations, including those at Bass Pro and Cabela’s store locations, may not reopen to the extent or when expected, or may be subject to additional closures in the future, particularly in locations where COVID-19 cases have increased; competitive conditions; our liquidity and the availability of capital; our ability to successfully implement our strategic plans and initiatives to navigate the COVID-19 pandemic; risks that default rates may increase and exceed the Company’s expectations, including due to the impact on consumers of the COVID-19 pandemic and if our efforts to address the actions of timeshare exit firms and the increase in default rates associated therewith are not successful; risks related to our indebtedness, including the  potential for accelerated maturities and debt covenant violations; the risk of heightened litigation as a result of actions taken in response to the COVID-19 pandemic; the impact of the COVID-19 pandemic on our operations and our payment of regular or special dividends in the future, including that despite the special cash dividend declared during July 2020, we have suspended the payment of regular quarterly cash dividends due to the impact of the COVID-19 pandemic, and dividends may not be paid at historical rates or at all; the impact of the COVID-19 pandemic on consumers, including their income, their level of  discretionary spending both during and after the pandemic, and their views towards travel and the vacation ownership industries; the risk that our resort management fees and  finance operations may not continue to generate recurring sources of cash during or following the pandemic to the extent anticipated or at all; risks that our current or future marketing alliances may not be available to us in the future;   that the Company’s current strategy to reduce sales of fee-based inventory may not result in EBITDA growth or otherwise positively impact the Company and such strategy may change; our ability to successfully implement our strategic plans and initiatives, generate earnings and long-term growth; risks that the Company’s costs, including costs of VOIs sold, will not be within the expected ranges; risks that natural disasters, including hurricanes, may result in declines in leisure travel or traffic at locations where we have marketing operations, adversely impact the availability of credit, or otherwise adversely impact the Company’s financial condition and operating results; any damage to physical assets or interruption of access to physical assets or operations resulting from public health issues, such as the COVID-19 outbreak, or from hurricanes, earthquakes, fires, floods, windstorms or other natural disasters, which may increase in frequency or severity due to climate change or other factors; 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, 2019, which was filed on March 12, 2020, and the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2020, which is expected to be filed on or about November 9, 2020.  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.



 

 


 

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FINANCIAL SCHEDULES



BLUEGREEN VACATIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

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,



 

2020

 

2019

 

2020

 

2019

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Gross sales of VOIs

 

$

71,149 

 

$

82,729 

 

$

157,530 

 

$

225,834 

Estimated uncollectible VOI notes receivable

 

 

(11,884)

 

 

(16,411)

 

 

(44,083)

 

 

(39,483)

Sales of VOIs

 

 

59,265 

 

 

66,318 

 

 

113,447 

 

 

186,351 



 

 

 

 

 

 

 

 

 

 

 

 

Fee-based sales commission revenue

 

 

22,119 

 

 

60,478 

 

 

64,619 

 

 

161,033 

Other fee-based services revenue

 

 

27,831 

 

 

33,744 

 

 

83,558 

 

 

94,015 

Cost reimbursements

 

 

15,684 

 

 

17,883 

 

 

46,654 

 

 

48,933 

Interest income

 

 

19,672 

 

 

22,081 

 

 

61,646 

 

 

65,964 

Other income, net

 

 

 —

 

 

2,146 

 

 

41 

 

 

4,228 

Total revenue

 

 

144,571 

 

 

202,650 

 

 

369,965 

 

 

560,524 



 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of VOIs sold

 

 

3,597 

 

 

3,121 

 

 

8,734 

 

 

17,541 

Cost of other fee-based services

 

 

20,861 

 

 

22,872 

 

 

61,107 

 

 

63,913 

Cost reimbursements

 

 

15,684 

 

 

17,883 

 

 

46,654 

 

 

48,933 

Selling, general and administrative expenses

 

 

79,350 

 

 

118,033 

 

 

222,427 

 

 

357,666 

Interest expense

 

 

7,319 

 

 

10,388 

 

 

24,677 

 

 

29,955 

Other expense, net

 

 

365 

 

 

 —

 

 

 —

 

 

 —

Total costs and expenses

 

 

127,176 

 

 

172,297 

 

 

363,599 

 

 

518,008 



 

 

 

 

 

 

 

 

 

 

 

 

Income before non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

 

  and provision for income taxes

 

 

17,395 

 

 

30,353 

 

 

6,366 

 

 

42,516 

Provision for income taxes

 

 

4,850 

 

 

7,778 

 

 

1,073 

 

 

9,124 

Net income

 

 

12,545 

 

 

22,575 

 

 

5,293 

 

 

33,392 

Less: Net income attributable to
  non-controlling interest

 

 

2,644 

 

 

2,248 

 

 

4,021 

 

 

9,095 

Net income attributable to Bluegreen

 

 

 

 

 

 

 

 

 

 

 

 

 Vacations Corporation shareholders

 

$

9,901 

 

$

20,327 

 

$

1,272 

 

$

24,297 



 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income attributable to

 

 

 

 

 

 

 

 

 

 

 

 

 Bluegreen Vacations Corporation

 

 

 

 

 

 

 

 

 

 

 

 

 shareholders

 

$

9,901 

 

$

20,327 

 

$

1,272 

 

$

24,297 



 

 

 

 

 

 

 

 

 

 

 

 



 

 


 

Picture 4

 

BLUEGREEN VACATIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (UNAUDITED)

(In thousands, except for share and per share data)









 

 

 

 

 

 

 

 

 

 

 

 



 

For the Three Months Ended

 

For the Nine Months Ended



 

September 30,

 

September 30,



 

2020

 

2019

 

2020

 

2019

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

 

$

0.14 

 

$

0.27 

 

$

0.02 

 

$

0.33 



 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares
  outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

72,485 

 

 

74,446 

 

 

73,010 

 

 

74,446 



 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

1.19 

 

$

0.17 

 

$

1.31 

 

$

0.51 



 

 


 

Picture 4

 

BLUEGREEN VACATIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)









 

 

 

 

 

 



 

For the Nine Months Ended



 

September 30,



 

2020

 

2019

Operating activities:

 

 

 

 

 

 

Net income

 

$

5,293 

 

$

33,392 

Adjustments to reconcile net income to net cash provided

 

 

 

 

 

 

by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

14,307 

 

 

14,069 

Loss (gain) on disposal of property and equipment

 

 

326 

 

 

(1,926)

Provision for loan losses

 

 

44,083 

 

 

39,483 

Benefit for deferred income taxes

 

 

(2,047)

 

 

(6,563)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Notes receivable

 

 

(5,628)

 

 

(46,205)

Prepaid expenses and other assets

 

 

12,473 

 

 

(10,586)

Inventory

 

 

(3,408)

 

 

(12,672)

Accounts payable, accrued liabilities and other, and

 

 

 

 

 

 

deferred income

 

 

(13,424)

 

 

41,333 

Net cash provided by operating activities

 

 

51,975 

 

 

50,325 



 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(5,895)

 

 

(18,502)

Proceeds from sale of property and equipment

 

 

167 

 

 

3,249 

Proceeds from repayment of related party loan

 

 

80,000 

 

 

 —

Net cash provided by (used in) investing activities

 

 

74,272 

 

 

(15,253)



 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

Proceeds from borrowings collateralized

 

 

 

 

 

 

by notes receivable

 

 

53,780 

 

 

79,168 

Payments on borrowings collateralized by notes receivable

 

 

(96,863)

 

 

(102,631)

Proceeds from borrowings collateralized

 

 

 

 

 

 

by line-of-credit facilities and notes payable

 

 

80,000 

 

 

20,386 

Payments under line-of-credit facilities and notes payable

 

 

(65,597)

 

 

(35,731)

Payments of debt issuance costs

 

 

(1,134)

 

 

(255)

Repurchase and retirement of common stock

 

 

(11,741)

 

 

 —

Dividends paid

 

 

(95,923)

 

 

(37,967)

Net cash used in financing activities

 

 

(137,478)

 

 

(77,030)

Net decrease in cash, cash equivalents and

 

 

 

 

 

 

restricted cash

 

 

(11,231)

 

 

(41,958)

Cash, cash equivalents and restricted cash at beginning of period

 

 

239,646 

 

 

273,134 

Cash, cash equivalents and restricted cash at end of period

 

$

228,415 

 

$

231,176 



 

 

 

 

 

 

Supplemental schedule of operating cash flow information:

 

 

 

 

 

 

Interest paid, net of amounts capitalized

 

$

22,912 

 

$

26,067 

Income taxes paid

 

$

400 

 

$

15,200 





 

 


 

Picture 4

 



BLUEGREEN VACATIONS CORPORATION

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except for per share data)







 

 

 

 

 

 



 

September 30,

 

December 31,



 

2020

 

2019

ASSETS 

 

 

 

 

 

 

Cash and cash equivalents

 

$

193,103 

 

$

190,009 

Restricted cash ($15,135 and $22,534 in VIEs at September 30, 2020

 

 

 

 

 

 

and December 31, 2019, respectively)

 

 

35,312 

 

 

49,637 

Notes receivable

 

 

559,918 

 

 

589,198 

Less: Allowance for loan losses

 

 

(149,805)

 

 

(140,630)

Notes receivable, net ($271,539 and $292,590 in VIEs

 

 

 

 

 

 

at September 30, 2020 and December 31, 2019, respectively)

 

 

410,113 

 

 

448,568 

Inventory

 

 

350,345 

 

 

346,937 

Prepaid expenses

 

 

13,577 

 

 

10,501 

Other assets

 

 

37,413 

 

 

52,731 

Operating lease assets

 

 

19,443 

 

 

20,858 

Intangible assets, net

 

 

61,452 

 

 

61,515 

Loan to related party

 

 

 —

 

 

80,000 

Property and equipment, net

 

 

93,046 

 

 

99,262 

Total assets

 

$

1,213,804 

 

$

1,360,018 



 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Accounts payable

 

$

17,511 

 

$

16,653 

Accrued liabilities and other

 

 

92,934 

 

 

103,948 

Operating lease liabilities

 

 

20,880 

 

 

22,124 

Deferred income

 

 

14,635 

 

 

18,074 

Deferred income taxes

 

 

90,457 

 

 

92,504 

Receivable-backed notes payable - recourse

 

 

77,417 

 

 

88,569 

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

 

 

303,301 

 

 

334,246 

Lines-of-credit and notes payable

 

 

160,671 

 

 

146,160 

Junior subordinated debentures

 

 

72,710 

 

 

72,081 

Total liabilities

 

 

850,516 

 

 

894,359 



 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 



 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

 

Common stock, $0.01 par value, 100,000,000 shares authorized; 72,484,293

 

 

 

 

 

 

shares issued and outstanding at September 30, 2020 and 74,362,693 shares

 

 

 

 

 

 

issued and outstanding at December 31, 2019

 

 

725 

 

 

744 

Additional paid-in capital

 

 

257,812 

 

 

269,534 

Retained earnings

 

 

51,196 

 

 

145,847 

Total Bluegreen Vacations Corporation shareholders' equity

 

 

309,733 

 

 

416,125 

Non-controlling interest

 

 

53,555 

 

 

49,534 

Total shareholders' equity

 

 

363,288 

 

 

465,659 

Total liabilities and shareholders' equity

 

$

1,213,804 

 

$

1,360,018 



 

 


 

Picture 4

 

BLUEGREEN VACATIONS CORPORATION

ADJUSTED EBITDA RECONCILIATION





 

 

 

 

 

 

 

 

 

 

 

 



 

For the Three Months Ended
September 30,

 

For the Nine Months Ended
September 30,

(in thousands)

 

2020

 

2019

 

2020

 

2019

Net income attributable to shareholders

 

$

9,901 

 

$

20,327 

 

$

1,272 

 

$

24,297 

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

 

 

2,644 

 

 

2,248 

 

 

4,021 

 

 

9,095 

       Net Income

 

 

12,545 

 

 

22,575 

 

 

5,293 

 

 

33,392 

Add: Depreciation and amortization

 

 

3,891 

 

 

3,585 

 

 

11,680 

 

 

10,453 

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

 

 

(623)

 

 

(1,799)

 

 

(3,388)

 

 

(5,437)

Add: Interest expense - corporate and other

 

 

3,409 

 

 

5,326 

 

 

11,932 

 

 

14,564 

Add: Franchise taxes

 

 

101 

 

 

112 

 

 

118 

 

 

171 

Add: Provision for income taxes

 

 

4,850 

 

 

7,778 

 

 

1,073 

 

 

9,124 

       EBITDA

 

 

24,173 

 

 

37,577 

 

 

26,708 

 

 

62,267 

Loss (gain) on assets held for sale

 

 

283 

 

 

(166)

 

 

326 

 

 

(2,146)

Add: Severance, net of employee retention

 

 

 

 

 

 

 

 

 

 

 

 

credits

 

 

381 

 

 

1,924 

 

 

4,904 

 

 

1,924 

Add: COVID-19 incremental costs

 

 

282 

 

 

 —

 

 

1,756 

 

 

 —

Add: Bass Pro Settlement

 

 

 —

 

 

 —

 

 

 —

 

 

39,121 

      Adjusted EBITDA

 

 

25,119 

 

 

39,335 

 

 

33,694 

 

 

101,166 

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

 

 

(2,757)

 

 

(2,364)

 

 

(4,438)

 

 

(9,339)

Adjusted EBITDA attributable to

 

 

 

 

 

 

 

 

 

 

 

 

 shareholders

 

$

22,362 

 

$

36,971 

 

$

29,256 

 

$

91,827 



 

 


 

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)

 

2020

 

2019

 

2020

 

2019

Adjusted EBITDA - sales of VOIs
  and financing

 

$

27,344 

 

$

41,618 

 

$

24,402 

 

$

107,152 

Adjusted EBITDA - resort operations
  and club management

 

 

15,391 

 

 

15,462 

 

 

49,429 

 

 

44,983 

Total Segment Adjusted EBITDA

 

 

42,735 

 

 

57,080 

 

 

73,831 

 

 

152,135 

Less: corporate and other

 

 

(20,373)

 

 

(20,109)

 

 

(44,575)

 

 

(60,308)

Total Adjusted EBITDA attributable
to shareholders

 

$

22,362 

 

$

36,971 

 

$

29,256 

 

$

91,827 



 

 


 

Picture 4

 

BLUEGREEN VACATIONS CORPORATION

SALES OF VOIs AND FINANCING SEGMENT- ADJUSTED EBITDA

 





 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 



 

For the Three Months Ended September 30,



 

2020

 

2019

 

 

Amount

 

% of
System-
wide sales
of VOIs (5)

 

Amount

 

% of
System-
wide sales
of VOIs (5)

(in thousands)

 

 

 

 

 

 

 

 

 

 

Developed VOI sales (1)

 

$

37,314 

 

36%

 

$

87,863 

 

52%

Secondary Market sales

 

 

24,076 

 

23

 

 

72,081 

 

42

Fee-Based sales

 

 

33,159 

 

32

 

 

87,646 

 

51

JIT sales

 

 

14,845 

 

14

 

 

4,505 

 

3

Less: Equity trade allowances (6)

 

 

(5,086)

 

(5)

 

 

(81,720)

 

(48)

System-wide sales of VOIs

 

 

104,308 

 

100%

 

 

170,375 

 

100%

Less: Fee-Based sales

 

 

(33,159)

 

(32)

 

 

(87,646)

 

(51)

Gross sales of VOIs

 

 

71,149 

 

68

 

 

82,729 

 

49

Provision for loan losses (2)

 

 

(11,884)

 

(17)

 

 

(16,411)

 

(20)

Sales of VOIs

 

 

59,265 

 

57

 

 

66,318 

 

39

Cost of VOIs sold (3)

 

 

(3,597)

 

(6)

 

 

(3,121)

 

(5)

Gross profit (3)

 

 

55,668 

 

94

 

 

63,197 

 

95

Fee-Based sales commission revenue (4)

 

 

22,119 

 

67

 

 

60,478 

 

69

Financing revenue, net of financing expense

 

 

15,545 

 

15

 

 

15,008 

 

9

Other income, net

 

 

 —

 

0

 

 

537 

 

(1)

Other fee-based services, title operations and other, net

 

 

481 

 

0

 

 

1,847 

 

1

Net carrying cost of VOI inventory

 

 

(8,580)

 

(8)

 

 

(5,878)

 

(3)

Selling and marketing expenses

 

 

(53,613)

 

(51)

 

 

(88,232)

 

(52)

General and administrative expenses - sales and
  marketing

 

 

(5,889)

 

(6)

 

 

(7,440)

 

(4)

Operating profit - sales of VOIs and financing

 

 

25,731 

 

25%

 

 

39,517 

 

23%

Add: Depreciation and amortization

 

 

1,405 

 

 

 

 

1,507 

 

 

Add: Severance

 

 

208 

 

 

 

 

594 

 

 

Adjusted EBITDA - sales of VOI and financing

 

$

27,344 

 

 

 

$

41,618 

 

 



(1)

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

(2)

Percentages for provision for loan losses are calculated as a percentage of gross sales of VOIs, which excludes Fee-Based sales (and not as a percentage 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 as a percentage 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 as a percentage 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.  Equity trade allowances were generally eliminated in June 2020 with certain exceptions. 







 

 


 

Picture 4

 

BLUEGREEN VACATIONS CORPORATION

SALES OF VOIs AND FINANCING SEGMENT- ADJUSTED EBITDA

 





 

 

 

 

 

 

 

 

 

 



 

For the Nine Months Ended September 30,



 

2020

 

2019



 

Amount

 

% of
System-
wide sales
of VOIs (5)

 

Amount

 

% of
System-
wide sales
of VOIs (5)

(in thousands)

 

 

 

 

 

 

 

 

 

 

Developed VOI sales (1)

 

$

128,396 

 

49%

 

$

255,288 

 

55%

Secondary Market sales

 

 

98,576 

 

39

 

 

184,571 

 

40%

Fee-Based sales

 

 

97,266 

 

39

 

 

237,793 

 

51

JIT sales

 

 

20,453 

 

8

 

 

9,157 

 

2

Less: Equity trade allowances (6)

 

 

(89,895)

 

(35)

 

 

(223,182)

 

(48)

System-wide sales of VOIs

 

 

254,796 

 

100%

 

 

463,627 

 

100%

Less: Fee-Based sales

 

 

(97,266)

 

(38)

 

 

(237,793)

 

(51)

Gross sales of VOIs

 

 

157,530 

 

62

 

 

225,834 

 

49

Provision for loan losses (2)

 

 

(44,083)

 

(28)

 

 

(39,483)

 

(17)

Sales of VOIs

 

 

113,447 

 

45

 

 

186,351 

 

40

Cost of VOIs sold (3)

 

 

(8,734)

 

(8)

 

 

(17,541)

 

(9)

Gross profit (3)

 

 

104,713 

 

92

 

 

168,810 

 

91

Fee-Based sales commission revenue (4)

 

 

64,619 

 

66

 

 

161,033 

 

68

Financing revenue, net of financing expense

 

 

46,658 

 

18

 

 

45,101 

 

10

Other income, net

 

 

 —

 

0

 

 

537 

 

0

Other fee-based services, title operations and other, net

 

 

2,364 

 

1

 

 

5,260 

 

1

Net carrying cost of VOI inventory

 

 

(27,407)

 

(11)

 

 

(18,853)

 

(4)

Selling and marketing expenses

 

 

(155,597)

 

(61)

 

 

(238,205)

 

(51)

General and administrative expenses - sales and
  marketing

 

 

(19,372)

 

(8)

 

 

(60,823)

 

(13)

Operating profit - sales of VOIs and financing

 

 

15,978 

 

6%

 

 

62,860 

 

14%

Add: Depreciation and amortization

 

 

4,447 

 

 

 

 

4,577 

 

 

Add: Severance

 

 

3,977 

 

 

 

 

594 

 

 

Add: Bass Pro Settlement

 

 

 —

 

 

 

 

39,121 

 

 

Adjusted EBITDA - sales of VOIs and financing

 

$

24,402 

 

 

 

$

107,152 

 

 



(1)

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

(2)

Percentages for provision for loan losses are calculated as a percentage of gross sales of VOIs, which excludes Fee-Based sales (and not as a percentage 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 as a percentage 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 as a percentage 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. Equity trade allowances were generally eliminated in June 2020 with certain exceptions.







 

 


 

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,



 

2020

 

2019

 

Change

 

2020

 

2019

 

Change



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of sales centers open