Bluegreen Vacations Corporation Reports Financial Results for the Fourth Quarter and Full Year 2020

BOCA RATON, Fla.--(BUSINESS WIRE)-- Bluegreen Vacations Corporation (NYSE: BXG) ("Bluegreen" or the “Company") reported today its financial results for the quarter and year ended December 31, 2020.

Fourth Quarter 2020 Highlights:

  • Net income attributable to shareholders was $7.0 million in the current year fourth quarter compared to $10.6 million in the prior year quarter.
  • Earnings Per Share (“EPS”) was $0.10 in the current year fourth quarter, compared to $0.14 in the prior year quarter.
  • Adjusted EBITDA attributable to shareholders decreased to $19.8 million in the current year fourth quarter, compared to $30.0 million in the prior year quarter.
  • Total revenue increased to $151.2 million in the current year quarter from $144.6 million in the third quarter of 2020, but decreased from the $183.9 million total revenue in the prior year fourth quarter.
  • System-wide sales of vacation ownership interests (“VOIs”) increased to $112.2 million in the current year fourth quarter from $104.3 million in the third quarter of 2020, but decreased from $155.5 million in the prior year fourth quarter.
  • The current year quarter’s results were adversely affected by the economic impact of the COVID-19 pandemic. In response to the pandemic, Bluegreen had temporarily closed all of its VOI sales centers in the last week of March 2020 but by December 31, 2020, the Company:
    • was operating marketing kiosks at 98 Bass Pro Shops and Cabela’s stores, including 10 new Cabela’s locations;
    • had reactivated the Choice Hotels call transfer program;
    • had reopened all of its resorts (resort occupancy rates for the fourth quarter of 2020 at resorts with sales centers was approximately 71%, compared to 80% in the fourth quarter of 2019);
    • and reopened all but two of its VOI sales centers.
  • Average sales volume per guest (“VPG”) increased 8% in the current year quarter compared to the fourth quarter of 2019.
  • The Company completed a private offering and sale of approximately $131.0 million of VOI receivable-backed notes in October 2020.

Full Year 2020 Highlights:

  • Net income attributable to shareholders was $8.2 million in 2020 compared to $34.9 million in 2019.
  • EPS was $0.11 in 2020, compared to $0.47 in 2019.
  • Adjusted EBITDA attributable to shareholders decreased to $49.4 million in 2020, compared to $121.8 million in 2019.
  • Total revenue decreased to $521.1 million in 2020 from $740.2 million in 2019.
  • System-wide sales of VOIs decreased to $367.0 million in 2020 from $619.1 million in 2019.
  • Free cash flow increased to $70.8 million in 2020, an increase of 54% from $46.1 million in 2019.

Alan B. Levan, Chairman, President and Chief Executive Officer of Bluegreen, commented, “We continue to be encouraged by the results of our ongoing focus on safely reopening our resorts and our sales and marketing operations after closing substantially all of these operations in March 2020 in response to the COVID-19 pandemic. We are very pleased with the pace of the rebound in our fourth quarter system-wide sales of VOIs, which at $112.2 million increased 7.6% from our system-wide sales of $104.3 million in the third quarter of 2020. In addition, our total revenue in the fourth quarter increased 4.6% from the third quarter of 2020. We believe that these were positive developments not only because they were achieved despite the continued impact of the COVID-19 pandemic, but also because the fourth quarter typically is a seasonally lower volume quarter than the third quarter. We believe that our consistent strategy for the past 27 years of having a primarily “drive-to” network of resorts has helped us achieve good levels of occupancy despite the pandemic, achieving a 71% total occupancy rate in the fourth-quarter 2020 at our resorts with sales centers, compared to 80% during the same period last year. Further, the Company posted its second quarter of consecutive profitability post-pandemic, generating $19.8 million in consolidated adjusted EBITDA attributable to shareholders and $7.0 million in net income attributable to shareholders in the fourth quarter. While there continues to be challenges ahead, these results are indicative of what we hope to continue to deliver through the “Bluegreen Renewal” initiative. Launched in fourth quarter of 2019, Bluegreen Renewal is a Company-wide initiative with the goal of revitalizing our sales and revenue growth and better managing our expenses. We believe that these initiatives have helped us navigate the ongoing COVID-19 pandemic and believe that this focus on growth and expense management positions us to profitably grow in the future after the impact of the pandemic subsides. 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.”

Mr. Levan continued, “As discussed in more detail in a separate press release, starting in the fourth quarter of 2019 and throughout 2020, we have redesigned and enhanced our sales and marketing infrastructure as part of the Bluegreen Renewal initiative investing in refreshing the physical appearance of our sales centers and marketing materials throughout the Company and our strategy includes pursuing a regional focus with each region led by senior vice presidents, each of whom have over 20 years of timeshare sales and marketing experience. In addition, we relocated our national sales leadership to Knoxville, TN, a central hub to Bluegreen’s sales and marketing footprint, headed by industry-veteran, Dusty Tonkin, as Bluegreen’s Executive Vice President, Chief Sales and Marketing Officer. Most importantly, we believe this strategy has made Bluegreen more agile to take advantage of opportunities for sales and marketing expansion in each region as market conditions allow.”

Mr. Levan concluded, “We are also pleased to report the continuing rebound in our vacation package sales despite the COVID-19 pandemic. We sold over 43,000 vacation packages in the fourth quarter, compared to approximately 55,000 in the fourth quarter of 2019. We’ve recommenced our marketing operations at 98 Bass Pro Shops and Cabela’s stores, including opening marketing kiosks at 10 new Cabela’s stores, and anticipate operating marketing kiosks in over 120 Bass Pro and Cabela’s store locations by the end of 2021. The Bass Pro/Cabela’s vacation package program now exceeds pre-pandemic volumes in the aggregate, and we look forward to the growth in VOI sales that we hope will follow from the growth in package sales. We also value our relationship with Choice Hotels and the historically successful call-transfer program with Choice. While this program continues to run at volumes commensurate with lower travel due to COVID-19, we believe that volumes of vacation packages sold through this program will return to historical levels as travel recovers.”

Financial Results

(dollars in millions, except per share data)

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2020

 

2019

 

Change

 

2020

 

2019

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

$

151.2

 

$

183.9

 

(17.8)

%

 

$

521.1

 

$

740.2

 

(29.6)

%

Income before non-controlling interest and provision for income taxes

$

12.5

 

$

15.7

 

(20.4)

%

 

$

18.8

 

$

58.3

 

(67.8)

%

Net income attributable to shareholders

$

7.0

 

$

10.6

 

(34.0)

%

 

$

8.2

 

$

34.9

 

(76.5)

%

Earnings per share basic and diluted

$

0.10

 

$

0.14

 

(28.6)

%

 

$

0.11

 

$

0.47

 

(76.6)

%

Adjusted EBITDA Attributable to Shareholders (1)

$

19.8

 

$

30.0

 

(34.0)

%

 

$

49.4

 

$

121.8

 

(59.4)

%

Capital-light revenue (2) as a percentage of total revenue

 

63.8%

 

 

61.0%

 

280

bp

 

 

66.7%

 

 

67.7%

 

(100)

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 $19.8 million, including $22.5 million generated from the Sales of VOIs and Financing Segment and $16.0 million produced by the Resort Operations and Club Management segment, partially offset by $18.7 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 December 31,

 

Year Ended December 31,

 

2020

 

2019

 

Change

 

2020

 

2019

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

System-wide sales of VOIs

$

112.2

 

$

155.5

 

(27.8)

%

$

367.0

 

$

619.1

 

(40.7)

%

Segment adjusted EBITDA

$

22.5

 

$

35.2

 

(36.1)

%

$

46.9

 

$

143.6

 

(67.3)

%

Sales offices

 

24

 

 

26

 

(7.7)

%

 

24

 

 

26

 

(7.7)

%

Sales offices selling to new prospects

 

18

 

 

19

 

(5.3)

%

 

18

 

 

19

 

(5.3)

%

Guest Tours

 

37,779

 

 

56,662

 

(33.3)

%

 

120,801

 

 

235,842

 

(48.8)

%

Average sales price per transaction

$

17,213

 

$

15,359

 

12.1

%

$

16,586

 

$

15,307

 

8.4

%

Selling and marketing expenses, as a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of system-wide sales of VOIs

 

55.1%

 

 

53.4%

 

170

bp

 

59.2%

 

 

51.9%

 

730

bp

Sales to tour conversion ratio

 

17.3%

 

 

18.0%

 

(70)

bp

 

18.4%

 

 

17.3%

 

110

bp

Sales volume per guest ("VPG")

$

2,976

 

$

2,758

 

7.9

%

$

3,046

 

$

2,642

 

15.3

%

Number of Bass Pro and Cabela's

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

marketing locations

 

98

 

 

83

 

18.1

%

 

98

 

 

83

 

18.1

%

Number of vacation packages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

outstanding, beginning of the period (1)

 

134,619

 

 

163,205

 

(17.5)

%

 

169,294

 

 

163,100

 

3.8

%

Number of vacation packages sold

 

43,632

 

 

54,898

 

(20.5)

%

 

131,970

 

 

205,161

 

(35.7)

%

Number of vacation packages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

outstanding, end of the period (1)

 

121,915

 

 

169,294

 

(28.0)

%

 

121,915

 

 

169,294

 

(28.0)

%

Provision for loan losses

 

17.5%

 

 

19.0%

 

(150)

bp

 

24.7%

 

 

17.9%

 

680

bp

Cost of VOIs sold

 

8.0%

 

 

6.2%

 

180

bp

 

7.8%

 

 

8.6%

 

(80)

bp

Financing revenue, net of financing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

expense

$

15,226

 

$

15,353

 

(0.8)

%

$

61,883

 

$

60,454

 

2.4

%

(1)

Excludes vacation packages sold to customers more than one year prior to the period presented and vacation packages sold to customers who had already toured but purchased an additional vacation package.

System-wide sales of VOIs

System-wide sales of VOIs were $112.2 million during the three months ended December 31, 2020. As discussed above, all of the Company’s VOI sales centers were temporarily closed on March 23, 2020. By the fourth quarter of 2020, the Company reopened all but two of its VOI sales centers and one of those two VOI sales centers was consolidated into another sales center due to local occupancy restrictions. System-wide sales of VOIs depend on the number of guests who attend a timeshare sale presentation, with each such guest counted as a “tour” that the Company can potentially convert into a sale of a VOI. The number of guest tours is driven by the number of existing owner guests the Company has staying at a resort with a sales center and the number of new guest arrivals that agree to attend a sales presentation. As a result of the COVID-19 pandemic, the number of guests and owners willing to travel decreased significantly, which lowered the number of completed tours. As a result, the sales mix for the fourth quarter of 2020 was heavily weighted toward sales to existing owners at 63% of system-wide sales of VOIs.

Fee-based sales commission revenue

Fee-based sales commission revenue was $25.3 million, approximately 65% of third-party VOI sales during the current fourth year quarter. Third-party VOI sales were 35% of system-wide sales during the quarter, which was lower than is typical. Third-party VOI sales which are more often made at sales centers selling to new prospects were more significantly impacted by the COVID-19 pandemic.

Selling and Marketing Expenses

Selling and marketing expenses were 55% of system-wide sales of VOIs during the current year fourth quarter as compared to 53% during the prior year quarter. As of December 31, 2020, the Company had recommenced marketing operations at 88 Bass Pro and Cabela’s locations and marketing operations commenced at 10 additional Cabela’s stores, for a total of 98 Bass Pro Shops and Cabela’s stores. These stores sell vacation packages to drive marketing guests to sales offices in the future. In addition, the Company restarted its call transfer marketing program with Choice Hotels, although the volume of packages sold through continue to be adversely impacted by the COVID-19 pandemic.

During the fourth quarter of 2020 we sold 43,632 vacation packages, compared to 54,898 vacation packages sold in the fourth quarter of 2019. This decrease reflects lower vacation package sales through the Choice program and other programs that were reduced or terminated, partially offset by an increase of 7% in vacation package sales through the Bass Pro and Cabela’s channel. The active pipeline of frontline vacation packages decreased to 121,915 at December 31, 2020 from 134,619 at September 30, 2020 and 169,294 at December 31, 2019, based on new vacation package sales during the quarter and net of vacation packages used or expired. Historically, approximately 42% of vacation packages resulted in a timeshare tour at one of Company’s resorts with a sales center within twelve months of purchase. In addition to the active pipeline discussed above, the Company also has a pipeline of vacation packages from customers who have already toured but purchased an additional vacation package and over 100,000 vacation packages that were purchased over 12 months prior to December 31, 2020. The Company has several programs in place to attempt to reactivate those vacation packages to promote future travel and in turn potential future VOI sales.

As recently announced, Bluegreen returned as the entitlement sponsor for The Bluegreen Vacations Duel At DAYTONA, a pair of 150-mile qualifying races for the DAYTONA 500 at Daytona International Speedway. Bluegreen believes that this sponsorship and other aspects of its relationship with NASCAR provide Bluegreen’s owners with experiences at NASCAR races that will be a driver of additional upgrade sales as well as to provide the Company an opportunity to introduce its resorts and destinations to NASCAR fans.

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 18% during the fourth quarter of 2020 compared to 19% during the 2019 quarter. The provision for new loans generated during the fourth quarter of 2020 was 24%, which was consistent with the prior year quarter.

The COVID-19 pandemic has had a material adverse impact on unemployment in the United States and economic conditions in general and the impact may continue for some time. The Company believes that the COVID-19 pandemic will continue to have an impact on the collectability of its VOI notes receivable. Accordingly, the Company increased its estimate of defaults for the 2021 year based on its historical experience, forbearance requests received from its customers, and other factors, including, but not limited to, the seasoning of the notes receivable and FICO scores of the customers; however there is no assurance that the allowance 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 and aggressively pursue its previously announced “zero tolerance strategy” in an effort to protect Bluegreen’s timeshare owners against the unscrupulous actions of these firms. Some of these 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. As previously announced, Bluegreen and the bankruptcy trustee for American Resort Management Group (“ARMG”), one of the so-called timeshare exit firms, ultimately entered into a court-approved settlement in connection with Bluegreen’s suit against ARMG which allowed 100% of Bluegreen’s claims against ARMG in an amount in excess of one million dollars. Bluegreen and the Trustee consider this matter a victory for the timeshare owners. In this regard, Bluegreen has agreed to work with the timeshare owners defrauded by ARMG to take back or process transfers of their timeshare interests. Bluegreen has also agreed to subordinate its claims against ARMG to the claims against ARMG by the timeshare owners, who have sought refunds of the fees paid to ARMG.

Net Carrying Cost of Inventory

Net carrying cost of inventory increased $2.3 million or 45% in the fourth quarter of 2020 compared to the fourth quarter of 2019, primarily due to decreased rentals of developer inventory, 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.

General and Administrative Expense

General and Administrative Expense related to the Company’s sales and marketing operations decreased $1.5 million or 15% as compared to the fourth quarter of 2019, primarily due to steps taken by the Company to mitigate costs during this period of reduced sales.

Financing Revenue, net of Financing Expense

Interest income on VOI notes receivable decreased 3.7% to $19.3 million in the fourth quarter of 2020 compared to the fourth quarter of 2019, primarily reflecting lower notes receivable balances as a result of lower VOI sales due to the COVID-19 pandemic. Interest expense on receivable-backed notes payable decreased 17.7% to $4.2 million in the fourth quarter of 2020 compared to the fourth quarter of 2019, primarily due to lower outstanding receivable-backed debt balances and a lower weighted-average cost of borrowings due to lower market interest rates.

Resort Operations and Club Management Segment

(dollars in millions)

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Resort operations and club management

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

revenue

$

43.7

 

$

42.0

 

4.0

%

 

$

168.6

 

$

174.9

 

(3.6)

%

Segment adjusted EBITDA

$

16.0

 

$

14.9

 

7.4

%

 

$

65.4

 

$

59.9

 

9.2

%

Resorts managed

 

49

 

 

49

 

%

 

 

49

 

 

49

 

%

In the fourth quarter of 2020, resort operations and management club revenue increased by $1.7 million, or 4%, to $43.7 million from $42.0 million in the prior year quarter, due to an increase in cost reimbursement revenue while not impacting segment adjusted EBITDA. Net of cost reimbursement revenue, resort operations and club management revenues decreased 4% as a result of decreases in revenues from our Traveler Plus program, other owner programs, resort retail operations and third-party rental commissions largely, Bluegreen believes, as a result of lower activity due to the COVID-19 pandemic. However, segment adjusted EBITDA increased 7% to $16.0 million in the fourth quarter of 2020 from $14.9 million in the comparable prior year period, driven primarily by lower costs incurred during the fourth quarter of 2020 costs due to steps taken to reduce costs in the first quarter of 2020 and lower Traveler Plus program costs, costs of other owner programs and costs of resort retail operations.

Corporate and Other

Adjusted EBITDA related to Corporate and Other decreased 7% to $(18.7) million in the fourth quarter of 2020 compared to $(20.2) million in the fourth quarter of 2019, primarily due to steps taken in the first quarter of 2020 to reduce costs.

Balance Sheet and Liquidity

As of December 31, 2020, unrestricted cash and cash equivalents totaled $203.7 million. Excluding receivable-backed notes payable, the Company’s net debt-to-EBITDA ratio as of December 31, 2020 was 0.16.

Subject to eligible collateral and the terms of the facilities, the Company had approximately $292.0 million of availability under its receivable-backed purchase and credit facilities, and corporate credit line as of December 31, 2020. During 2020, the Company repaid the $60.0 million previously drawn down in March 2020 under its line-of credit 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 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 $70.8 million for 2020, compared to $46.1 million for 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 $23.1 million, spending on the acquisition and development of inventory decreased $22.5 million and the purchase of property and equipment decreased $16.8 million during 2020 as compared to 2019. 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), 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.

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 a number of 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 operate 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 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 we have suspended the payment of regular quarterly cash dividends due to the impact of the COVID-19 pandemic, and the payment of dividends may not be resumed (or, if resumed, the amounts thereof may not be consistent with historical rates); 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 strategic alliances and arrangements, including our marketing arrangements with Bass Pro and the Choice Hotels program and our relationship with NASCAR and sponsorship of the Duel at Daytona race, may not result in the benefits anticipated, including increased VOI sales and that sales from the Choice Hotels program may not return to pre-pandemic levels; risks associated with the Bluegreen Renewal initiative, including that the initiative and expenses associated therewith, including with respect to sales centers and marketing activities, may not result in increased sales or revenues or otherwise in the benefits anticipated; the risk that the improvement in operating results in the fourth quarter of 2020 compared to the third quarter of 2020 may not be maintained or continue; the risk that vacation package sales may not convert to tours and/or VOI sales at anticipated or historical rates; the risk that our allowance for loan losses may not be adequate and, accordingly, may need to be further increased in the future; our ability to successfully implement our strategic plans and initiatives, generate earnings and long-term growth; 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, 2020, which is expected to be filed on or about March 1, 2021. 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. In addition, past performance may not be indicative of future results.

 

FINANCIAL SCHEDULES

 

BLUEGREEN VACATIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

(In thousands, except for per share data)

 

 

 

For the Three Months Ended

 

For the Years Ended

 

 

December 31,

 

December 31,

 

 

2020

 

2019

 

2020

 

2019

 

 

Unaudited

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Gross sales of VOIs

 

$

73,409

 

 

$

85,242

 

 

$

230,938

 

 

$

311,076

 

Provision for loan losses

 

 

(12,858

)

 

 

(16,218

)

 

 

(56,941

)

 

 

(55,701

)

Sales of VOIs

 

 

60,551

 

 

 

69,024

 

 

 

173,997

 

 

 

255,375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fee-based sales commission revenue

 

 

25,346

 

 

 

46,799

 

 

 

89,965

 

 

 

207,832

 

Other fee-based services revenue

 

 

28,265

 

 

 

31,229

 

 

 

111,823

 

 

 

125,244

 

Cost reimbursements

 

 

17,651

 

 

 

14,956

 

 

 

64,305

 

 

 

63,889

 

Interest income

 

 

19,376

 

 

 

21,938

 

 

 

81,022

 

 

 

87,902

 

Other income, net

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

 

151,189

 

 

 

183,946

 

 

 

521,112

 

 

 

740,242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of VOIs sold

 

 

4,863

 

 

 

4,304

 

 

 

13,597

 

 

 

21,845

 

Cost of other fee-based services

 

 

18,327

 

 

 

19,527

 

 

 

79,434

 

 

 

83,440

 

Cost reimbursements

 

 

17,651

 

 

 

14,956

 

 

 

64,305

 

 

 

63,889

 

Selling, general and administrative expenses

 

 

89,197

 

 

 

114,692

 

 

 

311,625

 

 

 

472,356

 

Interest expense

 

 

7,303

 

 

 

9,583

 

 

 

31,980

 

 

 

39,538

 

Other expense, net

 

 

1,386

 

 

 

5,138

 

 

 

1,342

 

 

 

910

 

Total costs and expenses

 

 

138,727

 

 

 

168,200

 

 

 

502,283

 

 

 

681,978

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before non-controlling interest and

 

 

 

 

 

 

 

 

 

 

 

 

provision for income taxes

 

 

12,462

 

 

 

15,748

 

 

 

18,829

 

 

 

58,264

 

Provision for income taxes

 

 

2,139

 

 

 

3,016

 

 

 

3,212

 

 

 

12,140

 

Net income

 

 

10,323

 

 

 

12,732

 

 

 

15,617

 

 

 

46,124

 

Less: Net income attributable to

non-controlling interest

 

 

3,371

 

 

 

2,178

 

 

 

7,392

 

 

 

11,273

 

Net income attributable to Bluegreen

 

 

 

 

 

 

 

 

 

 

 

 

Vacations Corporation shareholders

 

$

6,952

 

 

$

10,554

 

 

$

8,225

 

 

$

34,851

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income attributable to

 

 

 

 

 

 

 

 

 

 

 

 

Bluegreen Vacations Corporation

 

 

 

 

 

 

 

 

 

 

 

 

shareholders

 

$

6,952

 

 

$

10,554

 

 

$

8,225

 

 

$

34,851

 

 

BLUEGREEN VACATIONS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

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

 

 

 

For the Three Months Ended

 

For the Years Ended

 

 

 

December 31,

 

December 31,

 

 

 

2020

 

2019

 

2020

 

2019

 

 

 

Unaudited

 

 

 

 

 

 

 

Earnings per share attributable to

Bluegreen Vacations Corporation

shareholders - Basic and diluted

 

$

0.10

 

$

0.14

 

$

0.11

 

$

0.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

72,485

 

 

74,418

 

 

72,878

 

 

74,439

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

 

$

0.13

 

$

1.32

 

$

0.64

 

 

BLUEGREEN VACATIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

 

For the Year Ended

 

 

December 31,

 

 

2020

 

2019

Operating activities:

 

 

 

 

 

 

Net income

 

$

15,617

 

 

$

46,124

 

Adjustments to reconcile net income to net cash provided

 

 

 

 

 

 

by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

19,231

 

 

 

18,992

 

Loss on disposal of property and equipment

 

 

1,247

 

 

 

3,909

 

Provision for loan losses

 

 

56,941

 

 

 

55,701

 

(Benefit) provision for deferred income taxes

 

 

(5,100

)

 

 

1,448

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Notes receivable

 

 

(17,722

)

 

 

(65,910

)

Prepaid expenses and other assets

 

 

22,186

 

 

 

(2,706

)

Inventory

 

 

(185

)

 

 

(12,788

)

Accounts payable, accrued liabilities and other, and

 

 

 

 

 

 

deferred income

 

 

(13,663

)

 

 

25,788

 

Net cash provided by operating activities

 

 

78,552

 

 

 

70,558

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(7,704

)

 

 

(24,475

)

Proceeds from sale of property and equipment

 

 

190

 

 

 

4,880

 

Proceeds from repayment of related party loan

 

 

80,000

 

 

 

 

Net cash used in investing activities

 

 

72,486

 

 

 

(19,595

)

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

Proceeds from borrowings collateralized

 

 

 

 

 

 

by notes receivable

 

 

187,172

 

 

 

99,671

 

Payments on borrowings collateralized by notes receivable

 

 

(214,785

)

 

 

(137,468

)

Proceeds from borrowings under line-of-credit facilities

 

 

 

 

 

 

and notes payable

 

 

80,000

 

 

 

99,292

 

Payments under line-of-credit facilities and notes payable

 

 

(87,917

)

 

 

(86,784

)

Payments of debt issuance costs

 

 

(3,194

)

 

 

(3,332

)

Repurchase and retirement of common stock

 

 

(11,741

)

 

 

(835

)

Distributions to non-controlling interest

 

 

(4,900

)

 

 

(7,350

)

Dividends paid

 

 

(95,923

)

 

 

(47,645

)

Net cash used in financing activities

 

 

(151,288

)

 

 

(84,451

)

Net (decrease) increase in cash and cash equivalents

 

 

 

 

 

 

and restricted cash

 

 

(250

)

 

 

(33,488

)

Cash, cash equivalents and restricted cash at the beginning of period

 

 

239,646

 

 

 

273,134

 

Cash, cash equivalents and restricted cash at end of period

 

$

239,396

 

 

$

239,646

 

 

 

 

 

 

 

 

Supplemental schedule of operating cash flow information:

 

 

 

 

 

 

Interest paid, net of amounts capitalized

 

$

29,671

 

 

$

34,945

 

Income taxes (received) paid

 

$

(7,504

)

 

$

15,567

 

 

 

 

 

 

 

 

 

BLUEGREEN VACATIONS CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except for per share data)

 

 

 

December 31,

 

December 31,

 

 

2020

 

2019

ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

203,668

 

 

$

190,009

 

Restricted cash ($20,469 and $22,534 in VIEs at December 31, 2020

 

 

 

 

 

 

and December 31, 2019, respectively)

 

 

35,728

 

 

 

49,637

 

Notes receivable

 

 

551,393

 

 

 

589,198

 

Less: Allowance for loan losses

 

 

(142,044

)

 

 

(140,630

)

Notes receivable, net ($292,021 and $292,590 in VIEs

 

 

 

 

 

 

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

 

 

409,349

 

 

 

448,568

 

Inventory

 

 

347,122

 

 

 

346,937

 

Prepaid expenses

 

 

9,320

 

 

 

10,501

 

Other assets

 

 

31,378

 

 

 

52,731

 

Operating lease assets

 

 

34,325

 

 

 

20,858

 

Intangible assets, net

 

 

61,431

 

 

 

61,515

 

Loan to related party

 

 

 

 

 

80,000

 

Property and equipment, net

 

 

90,049

 

 

 

99,262

 

Total assets

 

$

1,222,370

 

 

$

1,360,018

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Accounts payable

 

$

10,604

 

 

$

16,653

 

Accrued liabilities and other

 

 

98,471

 

 

 

103,948

 

Operating lease liabilities

 

 

35,783

 

 

 

22,124

 

Deferred income

 

 

15,745

 

 

 

18,074

 

Deferred income taxes

 

 

87,404

 

 

 

92,504

 

Receivable-backed notes payable - recourse

 

 

38,500

 

 

 

78,569

 

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

 

 

355,833

 

 

 

344,246

 

Lines-of-credit and notes payable

 

 

138,386

 

 

 

146,160

 

Junior subordinated debentures

 

 

72,932

 

 

 

72,081

 

Total liabilities

 

 

853,658

 

 

 

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 December 31, 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

 

 

58,149

 

 

 

145,847

 

Total Bluegreen Vacations Corporation shareholders' equity

 

 

316,686

 

 

 

416,125

 

Non-controlling interest

 

 

52,026

 

 

 

49,534

 

Total shareholders' equity

 

 

368,712

 

 

 

465,659

 

Total liabilities and shareholders' equity

 

$

1,222,370

 

 

$

1,360,018

 

 

BLUEGREEN VACATIONS CORPORATION

ADJUSTED EBITDA RECONCILIATION

 

 

 

For the Three Months Ended
December 31,

 

 

For the Year Ended
December 31,

(in thousands)

 

2020

 

2019

 

 

2020

 

2019

Net income attributable to shareholders

 

$

6,952

 

 

$

10,554

 

 

 

$

8,225

 

 

$

34,851

 

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

 

 

3,371

 

 

 

2,178

 

 

 

 

7,392

 

 

 

11,273

 

Net Income

 

 

10,323

 

 

 

12,732

 

 

 

 

15,617

 

 

 

46,124

 

Add: Depreciation and amortization

 

 

3,883

 

 

 

3,661

 

 

 

 

15,563

 

 

 

14,114

 

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

 

 

(96

)

 

 

(1,754

)

 

 

 

(3,484

)

 

 

(7,191

)

Add: Interest expense - corporate and other

 

 

3,098

 

 

 

4,471

 

 

 

 

15,030

 

 

 

19,035

 

Add: Franchise taxes

 

 

51

 

 

 

22

 

 

 

 

169

 

 

 

193

 

Add: provision for income taxes

 

 

2,139

 

 

 

3,016

 

 

 

 

3,212

 

 

 

12,140

 

EBITDA

 

 

19,398

 

 

 

22,148

 

 

 

 

46,107

 

 

 

84,415

 

Loss (gain) on assets held for sale

 

 

921

 

 

 

5,802

 

 

 

 

1,247

 

 

 

3,656

 

Add: Severance and other (1)

 

 

2,923

 

 

 

4,343

 

 

 

 

9,659

 

 

 

6,267

 

Add: Bass Pro settlement

 

 

 

 

 

 

 

 

 

 

 

 

39,121

 

Adjusted EBITDA

 

 

23,242

 

 

 

32,293

 

 

 

 

57,013

 

 

 

133,459

 

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

 

 

(3,435

)

 

 

(2,330

)

 

 

 

(7,596

)

 

 

(11,670

)

Adjusted EBITDA attributable to shareholders

 

$

19,807

 

 

$

29,963

 

 

 

$

49,417

 

 

$

121,789

 

(1)

Severance and other consisted of severance, net of employee retention credits, a special bonus paid to all non-executive employees during the fourth quarter and COVID-19 incremental costs.

 

BLUEGREEN VACATIONS CORPORATION

SEGMENT ADJUSTED EBITDA SUMMARY

 

 

 

For the Three Months Ended
December 31,

 

 

For the Year Ended
December 31,

(in thousands)

 

2020

 

2019

 

 

2020

 

2019

Adjusted EBITDA - sales of VOIs and financing

 

$

22,518

 

 

$

35,235

 

 

 

$

46,909

 

 

$

143,581

 

Adjusted EBITDA - resort operations and club management

 

 

16,005

 

 

 

14,895

 

 

 

 

65,435

 

 

 

59,878

 

Total Segment Adjusted EBITDA

 

 

38,523

 

 

 

50,130

 

 

 

 

112,344

 

 

 

203,459

 

Less: Corporate and other

 

 

(18,716

)

 

 

(20,167

)

 

 

 

(62,927

)

 

 

(81,670

)

Total Adjusted EBITDA attributable to shareholders

 

$

19,807

 

 

$

29,963

 

 

 

$

49,417

 

 

$

121,789

 

 

BLUEGREEN VACATIONS CORPORATION

SALES OF VOIs AND FINANCING SEGMENT- ADJUSTED EBITDA

 

 

 

For the Three Months Ended December 31,

 

 

2020

 

2019

 

 

Amount

 

% of
System-
wide sales
of VOIs(5)

 

Amount

 

% of
System-
wide sales
of VOIs(5)

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Developed VOI sales (1)

 

$

49,112

 

 

44

%

 

$

100,065

 

 

64

%

Secondary Market sales

 

 

24,551

 

 

22

 

 

 

59,798

 

 

38

 

Fee-Based sales

 

 

38,793

 

 

35

 

 

 

70,239

 

 

45

 

JIT sales

 

 

6,441

 

 

6

 

 

 

3,687

 

 

2

 

Less: Equity trade allowances (6)

 

 

(6,695

)

 

(7

)

 

 

(78,308

)

 

(49

)

System-wide sales of VOIs

 

 

112,202

 

 

100

%

 

 

155,481

 

 

100

%

Less: Fee-Based sales

 

 

(38,793

)

 

(35

)

 

 

(70,239

)

 

(45

)

Gross sales of VOIs

 

 

73,409

 

 

65

 

 

 

85,242

 

 

55

 

Provision for loan losses (2)

 

 

(12,858

)

 

(18

)

 

 

(16,218

)

 

(19

)

Sales of VOIs

 

 

60,551

 

 

54

 

 

 

69,024

 

 

44

 

Cost of VOIs sold (3)

 

 

(4,863

)

 

(8

)

 

 

(4,304

)

 

(6

)

Gross profit (3)

 

 

55,688

 

 

92

 

 

 

64,720

 

 

94

 

Fee-Based sales commission revenue (4)

 

 

25,346

 

 

65

 

 

 

46,799

 

 

67

 

Financing revenue, net of

financing expense

 

 

15,226

 

 

14

 

 

 

15,353

 

 

10

 

Other (expense) income, net

 

 

(623

)

 

(1

)

 

 

1,337

 

 

1

 

Other fee-based services -

title operations, net

 

 

1,382

 

 

1

 

 

 

2,014

 

 

1

 

Net carrying cost of VOI inventory

 

 

(7,219

)

 

(6

)

 

 

(4,963

)

 

(3

)

Selling and marketing expenses

 

 

(61,810

)

 

(55

)

 

 

(83,011

)

 

(53

)

General and administrative expenses -

sales and marketing

 

 

(7,975

)

 

(7

)

 

 

(9,435

)

 

(6

)

Operating profit - sales of VOIs

and financing

 

 

20,015

 

 

18

%

 

 

32,814

 

 

21

%

Add: Depreciation

 

 

1,405

 

 

 

 

 

1,541

 

 

 

Add: Severance

 

 

475

 

 

 

 

 

822

 

 

 

Add: Loss on assets held for sale

 

 

623

 

 

 

 

 

58

 

 

 

Adjusted EBITDA - sales of VOIs

and financing

 

$

22,518

 

 

 

 

$

35,235

 

 

 

(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.

 

BLUEGREEN VACATIONS CORPORATION

SALES OF VOIs AND FINANCING SEGMENT- ADJUSTED EBITDA

 

 

 

For the Years Ended December 31,

 

 

2020

 

2019

 

 

Amount

 

% of
System-
wide sales
of VOIs(5)

 

Amount

 

% of
System-
wide sales
of VOIs(5)

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Developed VOI sales (1)

 

$

177,508

 

 

48

%

 

$

355,353

 

 

57

%

Secondary Market sales

 

 

117,023

 

 

32

 

 

 

234,883

 

 

38

 

Fee-Based sales

 

 

136,060

 

 

37

 

 

 

308,032

 

 

50

 

JIT sales

 

 

25,911

 

 

7

 

 

 

11,641

 

 

2

 

Less: Equity trade allowances (6)

 

 

(89,504

)

 

(24

)

 

 

(290,801

)

 

(47

)

System-wide sales of VOIs

 

 

366,998

 

 

100

%

 

 

619,108

 

 

100

%

Less: Fee-Based sales

 

 

(136,060

)

 

(37

)

 

 

(308,032

)

 

(50

)

Gross sales of VOIs

 

 

230,938

 

 

63

 

 

 

311,076

 

 

50

 

Provision for loan losses (2)

 

 

(56,941

)

 

(25

)

 

 

(55,701

)

 

(18

)

Sales of VOIs

 

 

173,997

 

 

47

 

 

 

255,375

 

 

41

 

Cost of VOIs sold (3)

 

 

(13,597

)

 

(8

)

 

 

(21,845

)

 

(9

)

Gross profit (3)

 

 

160,400

 

 

92

 

 

 

233,530

 

 

91

 

Fee-Based sales commission revenue (4)

 

 

89,965

 

 

66

 

 

 

207,832

 

 

67

 

Financing revenue, net of financing expense

 

 

61,883

 

 

17

 

 

 

60,454

 

 

10

 

Other (expense) income, net

 

 

(942

)

 

 

 

 

3,068

 

 

 

Other fee-based services, title operations and

other, net

 

 

3,745

 

 

1

 

 

 

7,274

 

 

1

 

Net carrying cost of VOI inventory

 

 

(34,626

)

 

(9

)

 

 

(23,816

)

 

(4

)

Selling and marketing expenses

 

 

(217,408

)

 

(59

)

 

 

(321,216

)

 

(52

)

General and administrative expenses - sales

and marketing

 

 

(27,347

)

 

(7

)

 

 

(70,258

)

 

(11

)

Operating profit - sales of VOIs and financing

 

 

35,670

 

 

10

%

 

 

96,868

 

 

16

%

Add: Depreciation and amortization

 

 

5,852

 

 

 

 

 

6,118

 

 

 

Add: Severance and other

 

 

4,445

 

 

 

 

 

1,416

 

 

 

Add: Bass Pro Settlement

 

 

 

 

 

 

 

39,121

 

 

 

Add: Loss on assets held for sale

 

 

942

 

 

 

 

 

58

 

 

 

Adjusted EBITDA - sales of VOIs

and financing

 

$

46,909

 

 

 

 

$

143,581

 

 

 

(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.

 

BLUEGREEN VACATIONS CORPORATION

SALES OF VOIs AND FINANCING SEGMENT

SALES AND MARKETING DATA

 

 

 

For the Three Months Ended
December 31,

 

For the Year Ended
December 31,

 

 

2020

 

2019

 

% Change

 

2020

 

2019

 

% Change

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of sales offices at period-end

 

 

24

 

 

26

 

(8)

%

 

 

24

 

 

26

 

(8)

%

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

 

 

15

 

 

15

 

%

 

 

15

 

 

15

 

%

Total number of VOI sales transactions

 

 

6,531

 

 

10,173

 

(36)

%

 

 

22,188

 

 

40,703

 

(45)

%

Average sales price per transaction

 

$

17,213

 

$

15,359

 

12

%

 

$

16,586

 

$

15,307

 

8

%

Number of total guest tours

 

 

37,779

 

 

56,662

 

(33)

%

 

 

120,801

 

 

235,842

 

(49)

%

Sale-to-tour conversion ratio– total marketing guests

 

 

17.3%

 

 

18.0%

 

(70)

bp

 

 

18.4%

 

 

17.3%

 

110

bp

Number of new guest tours

 

 

18,707

 

 

32,679

 

(43)

%

 

 

59,469

 

 

142,130

 

(58)

%

Sale-to-tour conversion ratio– new marketing guests

 

 

13.6%

 

 

14.6%

 

(100)

bp

 

 

14.6%

 

 

14.1%

 

50

bp

Percentage of sales to existing owners

 

 

63.0%

 

 

56.1%

 

690

bp

 

 

63.6%

 

 

54.5%

 

910

bp

Average sales volume per guest

 

$

2,976

 

$

2,758

 

8

%

 

$

3,046

 

$

2,642

 

15

%

(1)

As previously described, during the last week of March 2020 we temporarily closed all of our VOI sales centers in response to the COVID-19 pandemic. As of September 30, 2020, 25 of our 26 sales centers were open.

 

BLUEGREEN VACATIONS CORPORATION

RESORT OPERATIONS AND CLUB MANAGEMENT SEGMENT- ADJUSTED EBITDA

 

 

 

For the Three Months Ended
December 31,

 

 

For the Year Ended
December 31,

 

(dollars in thousands)

 

2020

 

2019

 

 

2020

 

2019

 

Resort operations and club management revenue

 

$

43,701

 

 

$

42,031

 

 

 

$

168,560

 

 

$

174,887

 

 

Resort operations and club management expense

 

 

(27,927

)

 

 

(33,267

)

 

 

 

(105,320

)

 

 

(122,428

)

 

Operating profit - resort operations and club management

 

 

15,774

 

36%

 

8,764

 

21%

 

 

63,240

 

38%

 

52,459

 

30%

Add: Depreciation and amortization

 

 

207

 

 

 

244

 

 

 

 

796

 

 

 

1,294

 

 

Add: Severance

 

 

23

 

 

 

 

 

 

 

1,369

 

 

 

238

 

 

Add: Loss on assets held for sale

 

 

1

 

 

 

5,887

 

 

 

 

30

 

 

 

5,887

 

 

Adjusted EBITDA - resort operations and club management

 

$

16,005

 

 

$

14,895

 

 

 

$

65,435

 

 

$

59,878

 

 

 

BLUEGREEN VACATIONS CORPORATION

CORPORATE AND OTHER - ADJUSTED EBITDA

 

 

 

For the Three Months Ended
December 31,

 

 

For the Year Ended
December 31,

(in thousands)

 

2020

 

2019

 

 

2020

 

2019

General and administrative expenses - corporate and other

 

$

(19,563

)

 

$

(22,525

)

 

 

$

(68,165

)

 

$

(81,128

)

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

 

 

(3,435

)

 

 

(2,330

)

 

 

 

(7,596

)

 

 

(11,670

)

Other (expense) income, net

 

 

(762

)

 

 

(588

)

 

 

 

(370

)

 

 

1,909

 

Franchise taxes

 

 

51

 

 

 

22

 

 

 

 

169

 

 

 

193

 

Loss (gain) on assets held for sale

 

 

297

 

 

 

(143

)

 

 

 

275

 

 

 

(2,289

)

Add: Depreciation and amortization

 

 

2,271

 

 

 

1,876

 

 

 

 

8,915

 

 

 

6,702

 

Add: Severance and other

 

 

2,425

 

 

 

3,521

 

 

 

 

3,845

 

 

 

4,613

 

Adjusted EBITDA - Corporate and other

 

$

(18,716

)

 

$

(20,167

)

 

 

$

(62,927

)

 

$

(81,670

)

 

 
 

BLUEGREEN VACATIONS CORPORATION

FREE CASH FLOW RECONCILIATION

 

 

 

For the Years Ended December 31,

(in thousands)

 

2020

 

2019

 

Net cash provided by operating activities

 

$

78,552

 

 

$

70,558

 

 

Purchases of property and equipment

 

 

(7,704

)

 

 

(24,475

)

 

Free Cash Flow

 

$

70,848

 

 

$

46,083

 

 

 

 
 

BLUEGREEN VACATIONS CORPORATION

OTHER FINANCIAL DATA

 

 

 

For the Three Months Ended
December 31,

 

 

For the Year Ended
December 31,

(in thousands)

 

2020

 

2019

 

 

2020

 

2019

Financing Interest Income

 

$

19,280

 

 

$

20,025

 

 

 

$

77,538

 

 

$

80,010

 

Financing Interest Expense

 

 

(4,205

)

 

 

(5,112

)

 

 

 

(16,950

)

 

 

(20,503

)

Non-Financing Interest Income

 

 

96

 

 

 

1,913

 

 

 

 

3,484

 

 

 

7,892

 

Non-Financing Interest Expense

 

 

(3,098

)

 

 

(4,471

)

 

 

 

(15,030

)

 

 

(19,035

)

 

 
 

BLUEGREEN VACATIONS CORPORATION

SYSTEM-WIDE SALES OF VOIs RECONCILIATION

 

 

 

For the Three Months Ended
December 31,

 

 

For the Year Ended
December 31,

(in thousands)

 

2020

 

2019

 

 

2020

 

2019

Gross sales of VOIs

 

$

73,409

 

$

85,242

 

 

$

230,938

 

$

311,076

Add: Fee-based sales

 

 

38,793

 

 

70,239

 

 

 

136,060

 

 

308,032

System-wide sales of VOIs

 

$

112,202

 

$

155,481

 

 

$

366,998

 

$

619,108

 

BLUEGREEN VACATIONS CORPORATION

DEFINITIONS

Principal Components Affecting our Results of Operations

Principal Components of Revenues

Fee-Based Sales. Represent sales of third-party VOIs where we are paid a commission.

JIT Sales. Represent sales of VOIs acquired from third parties in close proximity to when we intend to sell such VOIs.

Secondary Market Sales. Represent sales of VOIs acquired from HOAs or other owners, typically in connection with maintenance fee defaults. This inventory is generally purchased at a greater discount to retail price compared to developed VOI sales and VOIs purchased by us for sale as part of our JIT sales activities.

Developed VOI Sales. Represent sales of VOIs in resorts that we have developed or acquired (not including inventory acquired through JIT and secondary market arrangements).

Financing Revenue. Represents revenue from the financing of VOI sales, which includes interest income and loan servicing fees. We also earn fees from providing mortgage servicing to certain third-party developers relating to VOIs sold by them.

Resort Operations and Club Management Revenue. Represents recurring fees from managing the Vacation Club and transaction fees for Traveler Plus and other member services. We also earn recurring management fees under our management agreements with HOAs for day-to-day management services, including oversight of housekeeping services, maintenance, and certain accounting and administrative functions.

Other Fee-Based Services. Represents revenue earned from various other services that produce recurring, predictable and long-term revenue, such as title services.

Principal Components of Expenses

Cost of VOIs Sold. Represents the cost at which our owned VOIs sold during the period were relieved from inventory. In addition to inventory from our VOI business, our owned VOIs also include those that were acquired by us under JIT and secondary market arrangements. Compared to the cost of our developed VOI inventory, VOIs acquired in connection with JIT arrangements typically have a relatively higher associated cost of sales as a percentage of sales while those acquired in connection with secondary market arrangements typically have a lower cost of sales as a percentage of sales as secondary market inventory is generally obtained from HOAs at a significant discount to retail price. 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 (primarily due to offered volume discounts, and taking into account consideration of cumulative sales to existing owners). Additionally, the effect of changes in estimates under the relative sales value method, including estimates of projected sales, future defaults, upgrades and incremental revenue from the resale of repossessed VOI inventory, are reflected on a retrospective basis in the period the change occurs. Cost of sales is typically favorably impacted in periods where a significant amount of secondary market VOI inventory is acquired and actual defaults and equity trades are higher and the resulting change in estimate is recognized. While we believe that there is additional inventory that can be obtained through the secondary market at favorable prices to us in the future, there is no assurance that such inventory will be available.

Net Carrying Cost of VOI Inventory. Represents the maintenance fees and developer subsidies for unsold VOI inventory paid or accrued to the HOAs that maintain the resorts. We attempt to offset this expense, to the extent possible, by generating revenue from renting our VOIs and through utilizing them in our sampler programs. We net such revenue from this expense item.

Selling and Marketing Expense. Represents costs incurred to sell and market VOIs, including costs relating to marketing and incentive programs, tours, and related wages and sales commissions. Revenue from vacation package sales are netted against selling and marketing expenses.

Financing Expense. Represents financing interest expense related to our receivable-backed debt, amortization of the related debt issuance costs and other expenses incurred in providing financing and servicing loans, including administrative costs associated with mortgage servicing activities for our loans and the loans of certain third-party developers. Mortgage servicing activities include, among other things, payment processing, reporting and collection services.

Resort Operations and Club Management Expense. Represents costs incurred to manage resorts and the Vacation Club, including payroll and related costs and other administrative costs to the extent not reimbursed by the Vacation Club or HOAs.

General and Administrative Expense. Primarily represents compensation expense for personnel supporting our business and operations, professional fees (including consulting, audit and legal fees), and administrative and related expenses.

Key Business and Financial Metrics and Terms Used by Management

Sales of VOIs. Represent sales of our owned VOIs, including developed VOIs and those acquired through JIT and secondary market arrangements, reduced by equity trade allowances and an estimate of uncollectible VOI notes receivable. In addition to the factors impacting system-wide sales of VOIs (as described below), sales of VOIs are impacted by the proportion of system-wide sales of VOIs sold on behalf of third-parties on a commission basis, which are not included in sales of VOIs.

System-wide Sales of VOIs. Represents all sales of VOIs, whether owned by us or a third party immediately prior to the sale. Sales of VOIs owned by third parties are transacted as sales of VOIs in our Vacation Club through the same selling and marketing process we use to sell our VOI inventory. We consider system-wide sales of VOIs to be an important operating measure because it reflects all sales of VOIs by our sales and marketing operations without regard to whether we or a third party owned such VOI inventory at the time of sale. System-wide sales of VOIs is not a recognized term under GAAP and should not be considered as an alternative to sales of VOIs or any other measure of financial performance derived in accordance with GAAP or to any other method of analyzing our results as reported under GAAP.

Guest Tours. Represents the number of sales presentations given at our sales centers during the period.

Sale to Tour Conversion Ratio. Represents the rate at which guest tours are converted to sales of VOIs and is calculated by dividing guest tours by number of VOI sales transactions.

Average Sales Volume Per Guest (“VPG”). Represents the sales attributable to tours at our sales locations and is calculated by dividing VOI sales by guest tours. We consider VPG to be an important operating measure because it measures the effectiveness of our sales process, combining the average transaction price with the sale-to-tour conversion ratio.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA Attributable to Shareholders. We define EBITDA as earnings, or net income, before taking into account interest income (excluding interest earned on VOI notes receivable), interest expense (excluding interest expense incurred on debt secured by our VOI notes receivable), income and franchise taxes and depreciation and amortization. We define Adjusted EBITDA as our EBITDA, adjusted to exclude amounts of loss (gain) on assets held for sale, and other items that we believe are not representative of ongoing operating results. Accordingly, we exclude certain items such as severance charges net of employee retention tax credits, incremental costs associated with the COVID-19 pandemic, and amounts accrued or incurred in connection with the Bass Pro settlement in June 2019. We define Adjusted EBITDA Attributable to Shareholders as our Adjusted EBITDA excluding amounts attributable to the non-controlling interest in Bluegreen/Big Cedar Vacations (in which we own a 51% interest). For purposes of the EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders calculations for each period presented, no adjustments were made for interest income earned on our VOI notes receivable or the interest expense incurred on debt that is secured by such notes receivable because they are both considered to be part of the ordinary operations of our business.

We consider our EBITDA, Adjusted EBITDA, Adjusted EBITDA Attributable to Shareholders and Segment Adjusted EBITDA to be indicators of our operating performance, and they are used by us to measure our ability to service debt, fund capital expenditures and expand our business. EBITDA and Adjusted EBITDA are also used by companies, lenders, investors and others because they exclude certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders are not recognized terms under GAAP and should not be considered as an alternative to net income (loss) or any other measure of financial performance or liquidity, including cash flow, derived in accordance with GAAP, or to any other method or analyzing our results as reported under GAAP. The limitations of using EBITDA, Adjusted EBITDA or Adjusted EBITDA Attributable to Shareholders as an analytical tool include, without limitation, that EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders do not reflect (i) changes in, or cash requirements for, our working capital needs; (ii) our interest expense, or the cash requirements necessary to service interest or principal payments on our indebtedness (other than as noted above); (iii) our tax expense or the cash requirements to pay our taxes; (iv) historical cash expenditures or future requirements for capital expenditures or contractual commitments; or (v) the effect on earnings or changes resulting from matters that we consider not to be indicative of our future operations or performance. Further, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders do not reflect any cash requirements for such replacements. In addition, our definition of Adjusted EBITDA or Adjusted EBITDA Attributable to Shareholders may not be comparable to definitions of Adjusted EBITDA, Adjusted EBITDA Attributable to Shareholders or other similarly titled measures used by other companies.

Bluegreen Vacations Corporation
Investor Relations: Leo Hinkley, Managing Director, Investor Relations Officer
Telephone: 954-940-5336 Email: Leo.Hinkley@BluegreenVacations.com

Source: Bluegreen Vacations Corporation