BBX Capital Corporation

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BBX Capital Corporation Reports Financial Results For the Fourth Quarter and Full Year, 2019

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FORT LAUDERDALE, Fla.--(BUSINESS WIRE)-- BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB) (“BBX Capital” or the “Company”) reported today its financial results for the quarter and year ended December 31, 2019.

Selected highlights of BBX Capital’s consolidated financial results include:

Fourth Quarter 2019 Compared to Fourth Quarter 2018:

  • Total consolidated revenues of $234.2 million vs. $231.8 million
  • Net income attributable to shareholders of $5.5 million vs. $11.3 million
  • Diluted earnings per share of $0.06 vs. $0.12
  • Free cash flow of $8.5 million vs. $30.8 million
  • Adjusted EBITDA of $25.0 million vs. $36.6 million

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018:

  • Total consolidated revenues of $946.9 million vs. $945.9 million
  • Net income attributable to shareholders of $17.7 million vs. $35.1 million
  • Diluted earnings per share of $0.19 vs. $0.36
  • Free cash flow of $42.7 million vs. $41.1 million
  • Adjusted EBITDA of $123.3 million vs. $109.3 million

Balance Sheet as of December 31, 2019 Compared to December 31, 2018:

  • Total consolidated assets of $1.8 billion vs. $1.7 billion
  • Total shareholders' equity of $549.8 million vs. $549.6 million
  • Fully diluted book value per share of $5.84 vs. $5.70 (1)

(1)

Fully diluted book value per share is shareholders’ equity divided by the number of Class A and Class B common shares and unvested restricted stock awards outstanding as of period end.

 

During the quarter ended December 31, 2019, the Company repurchased approximately 1.4 million shares of its Class A Common Stock for $6.6 million pursuant to the share repurchase program approved by the Company’s Board of Directors in June 2017. As of December 31, 2019, the Company had repurchased approximately 4.8 million shares of its Class A Common Stock for $25.4 million under the June 2017 repurchase program.

“The results for the fourth quarter and full year 2019 reflect BBX Capital’s focus on its strategic initiatives and objective of achieving long-term growth,” commented Alan B. Levan, Chairman and Chief Executive Officer of BBX Capital Corporation. “While Bluegreen’s results in 2019 were negatively impacted by issues associated with our relationship with Bass Pro, we are pleased that Bluegreen and Bass Pro were able to resume building on their very successful 20-year partnership, as reflected in Bluegreen’s entry into 15 Cabela’s retail stores as of December 31, 2019. BBX Capital Real Estate unlocked intrinsic value through the monetization of investments in its portfolio, including its Altis at Bonterra joint venture, and continues to be focused on expanding its pipeline of investment opportunities in multifamily apartment and residential housing communities. Renin continued to seek to diversify its customer base while navigating the complexities associated with tariffs on Chinese produced goods. IT’SUGAR grew its ‘retail-tainment’ branded stores with the recent opening of its newest flagship store at American Dream in New Jersey.

“Since many of our assets do not generate income on a regular or predictable basis, our objective continues to be long-term growth as measured by increases in book value and intrinsic value over time. One of our goals is to streamline our business verticals so that our business model can be more easily analyzed and followed by the markets. To this end, we plan to continue to review the performance of our assets and investments and consider transactions involving the sale, disposition, or spin-off of assets, investments, or subsidiaries,” Levan concluded.

Issues arising as a consequence of the coronavirus outbreak have resulted in uncertainties for our operations and results moving forward. See “Forward-Looking Statements” below.

Additional Information

For more complete and detailed information regarding BBX Capital and its financial results, business, operations, investments, and risks, please see BBX Capital’s Annual Report on Form 10-K for the year ended December 31, 2019, which will be available on the SEC's website, https://www.sec.gov, and on BBX Capital’s website, www.BBXCapital.com, upon filing with the SEC, which is expected to occur no later than March 16, 2020.

Non-GAAP Financial Measures

The Company refers to certain non-GAAP financial measures in this press release, including EBITDA, Adjusted EBITDA, System-wide Sales of VOIs, and Free Cash Flow. Please see the supplemental tables herein for how these terms are defined and for reconciliations of such measures to the most comparable GAAP financial measures.

Financial Results

The following selected information relates to the financial results of Bluegreen Vacations, BBX Capital Real Estate, BBX Sweet Holdings, and Renin.

Bluegreen Vacations - Selected Financial Data

Selected highlights of Bluegreen Vacations’ financial results include:

Fourth Quarter 2019 Compared to Fourth Quarter 2018:

  • Sales of Vacation Ownership Interests (“VOIs”) of $69.0 million vs. $58.8 million
  • System-wide sales of VOIs of $155.5 million vs. $146.0 million
  • Fee-based sales commissions of $46.8 million vs. $48.8 million
  • Other fee-based services revenue of $31.2 million vs. $28.6 million
  • Income before income taxes of $15.7 million vs. $26.2 million
  • Adjusted EBITDA of $30.0 million vs. $31.7 million
  • Free cash flow of $14.3 million vs. $22.9 million

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018:

  • Sales of VOIs of $255.4 million vs. $254.2 million
  • System-wide sales of VOIs of $619.1 million vs. $624.1 million
  • Fee-based sales commissions of $207.8 million vs. $216.4 million
  • Other fee-based services revenue of $125.2 million vs. $118.0 million
  • Income before income taxes of $58.3 million vs. $128.9 million
  • Adjusted EBITDA of $121.8 million vs. $141.8 million
  • Free cash flow of $46.1 million vs. $44.3 million

In addition to BBX Capital’s Annual Report on Form 10-K for the year ended December 31, 2019, more complete and detailed information regarding Bluegreen Vacations and its financial results, business, operations, and risks can be found in Bluegreen Vacations’ Annual Report on Form 10-K for the year ended December 31, 2019, which will be available on the SEC's website, https://www.sec.gov, and on Bluegreen Vacations’ website, www.BluegreenVacations.com, upon filing with the SEC, which is expected to occur no later than March 16, 2020.

BBX Capital Real Estate - Selected Financial Data

Selected highlights of BBX Capital Real Estate’s (“BBXRE”) financial results include:

Fourth Quarter 2019 Compared to Fourth Quarter 2018:

  • Revenues of $2.7 million vs. $5.2 million
  • Equity in net earnings of unconsolidated real estate joint ventures of $0.6 million vs. $13.0 million
  • Income before income taxes of $2.1 million vs. $14.6 million

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018:

  • Revenues of $21.0 million vs. $31.2 million
  • Equity in net earnings of unconsolidated real estate joint ventures of $37.9 million vs. $14.2 million
  • Income before income taxes of $52.7 million vs. $30.2 million

BBXRE’s operating results for the quarter ended December 31, 2019 as compared to the same 2018 period primarily reflects the timing of sales activity in BBXRE’s portfolio, as the 2018 period included the impact of significant gains recognized upon the sale of multifamily apartment communities by two unconsolidated joint ventures.

BBX Sweet Holdings- Selected Financial Data

Selected highlights of BBX Sweet Holding’s (“BBXSH”) financial results include:

Fourth Quarter 2019 Compared to Fourth Quarter 2018:

  • Trade sales of $29.4 million vs. $28.7 million
  • Gross margin of $10.5 million vs. $9.6 million
  • Gross margin percentage of 35.8% vs. 33.5%
  • Loss before income taxes of $(0.8) million vs. $(6.4) million
  • Adjusted EBITDA of $0.6 million vs $(0.7) million

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018:

  • Trade sales of $105.4 million vs. $101.2 million
  • Gross margin of $37.7 million vs. $35.4 million
  • Gross margin percentage of 35.8% vs. 34.9%
  • Loss before income taxes of $(5.1) million vs. $(15.0) million
  • Adjusted EBITDA of $0.5 million vs. $(2.9) million

BBX Sweet Holdings (“BBXSH”) is engaged in the ownership and management of operating businesses in the confectionery industry, including IT’SUGAR, Hoffman’s Chocolates, and Las Olas Confections and Snacks. BBXSH’s operating results for the quarter ended December 31, 2019 as compared to the same 2018 period reflect an increase in trade sales and improved gross margin primarily related to increased sales at IT’SUGAR, including sales from its new locations that were opened in 2019, improvements in efficiencies at BBXSH’s manufacturing facility in Orlando, and lower selling, general, and administrative expenses as a result of cost reduction initiatives. In addition, BBXSH’s loss before income taxes in the 2018 period included a $4.0 million goodwill impairment loss associated with a subsidiary in the wholesale confection business.

In December 2019, IT’SUGAR opened its 22,000 square foot, three-story candy department store at American Dream, a 3 million square foot shopping and entertainment complex in New Jersey.

Renin - Selected Financial Data

Selected highlights of Renin’s financial results include:

Fourth Quarter 2019 Compared to Fourth Quarter 2018:

  • Trade sales of $16.4 million vs. $21.2 million
  • Gross margin of $3.2 million vs. $4.2 million
  • Gross margin percentage of 19.2% vs. 19.7%
  • Income before income taxes of $0.3 million vs. $1.8 million
  • Adjusted EBITDA of $0.7 million vs $2.4 million

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018:

  • Trade sales of $67.5 million vs. $68.4 million
  • Gross margin of $13.3 million vs. $12.9 million
  • Gross margin percentage of 19.7% vs. 18.9%
  • Income before income taxes of $1.8 million vs. $2.5 million
  • Adjusted EBITDA of $3.7 million vs $5.0 million

Renin’s operating results for the quarter ended December 31, 2019 as compared to the same 2018 period primarily reflect a decrease in trade sales in 2019 due to lower sales volume from Renin’s retail channel customers. The 2018 period included a holiday promotion with a customer that was not repeated in 2019 and a new customer program that is in less stores in 2019. Renin’s operating results in 2019 were also impacted by a decline in gross margin percentage primarily resulting from tariffs on imported product and higher selling, general and administrative expenses primarily due the recognition of severance expenses and higher employee compensation expense associated with performance bonuses.

About BBX Capital Corporation: BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB) is a Florida-based diversified holding company whose principal investments include Bluegreen Vacations Corporation (NYSE: BXG), BBX Capital Real Estate, BBX Sweet Holdings, and Renin. For additional information, please visit www.BBXCapital.com.

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 vacation ownership plan with approximately 220,000 owners, 68 Club and Club Associate Resorts, and access to nearly 11,350 other hotels and resorts through partnerships and exchange networks as of December 31, 2019. Bluegreen Vacations also offers a portfolio of comprehensive, fee-based resort management, financial, and sales and marketing services, to or on behalf of third parties. Bluegreen is approximately 90% owned by BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB), a diversified holding company. For further information, visit www.BluegreenVacations.com.

Forward-Looking Statements

This press release contains forward-looking statements based largely on current expectations of BBX Capital or its subsidiaries that involve a number of risks and uncertainties. All opinions, forecasts, projections, future plans or other statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements may be identified by the use of words or phrases such as “plans,” “believes,” “will,” “expects,” “anticipates,” “intends,” “estimates,” “our view,” “we see,” “would” and words and phrases of similar import. The forward-looking statements in this press release are also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We can give no assurance that such expectations will prove to have been correct. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements contained herein. Forward-looking statements are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control and the reader should not place undue reliance on any forward-looking statement, which speaks only as of the date made. This press release also contains information regarding the past performance of the Company, its subsidiaries and their respective investments and operations, and the reader should note that prior or current performance is not a guarantee or indication of future performance. Future results could differ materially as a result of a variety of risks and uncertainties. Some factors which may affect the accuracy of the forward-looking statements apply generally to the industries in which the Company operates, including the resort development and vacation ownership industries in which Bluegreen operates, the residential and commercial real estate industry in which BBXRE operates, the sugar and confectionery industry in which BBX Sweet Holdings operates, and the home improvement industry in which Renin operates. Risks and uncertainties include, without limitation, the risks and uncertainties affecting BBX Capital and its subsidiaries, and their respective results, operations, markets, products, services and business strategies, including risks associated with the ability to successfully implement currently anticipated plans and generate earnings, long term growth, and increased value; the risk that BBX Capital’s efforts to streamline its businesses and reduce losses may not be successful or achieve the anticipated or desired benefits; the performance of entities of which BBX Capital has acquired or in which it has made investments may not be profitable or perform as anticipated; the risk that BBX Capital is dependent upon dividends from its subsidiaries, principally Bluegreen, to fund its operations and that its subsidiaries may not be in a position to pay dividends at current levels, if at all, dividend payments may be subject to certain restrictions, including restrictions contained in debt instruments, and may be subject to declaration by such subsidiary’s board of directors or managers; the risks relating to acquisitions, including acquisitions in diverse activities, including the risk that they will not perform as expected and will adversely impact the Company’s results; risks relating to the monetization of BBX Capital’s assets; and risks related to litigation and other legal proceedings involving BBX Capital and its subsidiaries. The Company’s investment in Bluegreen Vacations Corporation exposes the Company to risks of Bluegreen’s business including risks relating to its ability to increase VOI sales and profitability and risks inherent in the vacation ownership industry, risks relating to its operations, its relationships with its strategic partners and its ability to successfully grow new marketing partnerships and alliances, risks that Bluegreen’s marketing alliances will not contribute to growth or be profitable, risks that the expansion of the Bass Pro/Cabela’s marketing channels will not be successful or occur as anticipated; as well as other risks relating to the ownership of Bluegreen’s common stock, including those described in Bluegreen’s Annual and Quarterly Reports filed with the SEC. In addition, with respect to BBX Capital Real Estate, BBX Sweet Holdings, Renin, and its other investments in operating businesses, the risks and uncertainties include risks relating to the real estate market and real estate development, the risk that joint venture partners may not fulfill their obligations and the projects may not be developed as anticipated or be profitable, risks related to the concentration of investments with the same joint venture partner, and the risk that contractual commitments may not be completed on the terms provided or at all; risks relating to acquisition and performance of operating businesses, including integration risks, risks regarding achieving profitability, foreign currency transaction risk, goodwill and other intangible impairment risks, risks relating to restructurings and restated charges, and the risk that assets may be disposed of at a loss. In addition, the recent coronavirus could cause disruptions in our supply chain, decreased demand for products, declines in leisure travel and traffic at retail locations, impact the availability of credit, or otherwise adversely impact our financial condition and operations results. Reference is also made to the other risks and uncertainties described in BBX Capital’s Annual Report on Form 10-K for the year ended December 31, 2019, which will be available on the SEC's website, https://www.sec.gov, and on BBX Capital’s website, www.BBXCapital.com, upon filing with the SEC. The Company cautions that the foregoing factors are not exclusive, and that the reader should not place undue reliance on any forward-looking statement, which speaks only as of the date made.

The following supplemental table presents BBX Capital’s Consolidating Statement of Operations (unaudited) for the three months ended December 31, 2019 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

Bluegreen

 

BBX

Capital

Real Estate

 

BBX Sweet

Holdings

 

Renin

 

Other

 

Reconciling

Items and

Eliminations

 

Segment

Total

Sales of VOIs

 

$

69,024

 

 

 

 

 

 

 

 

 

 

 

 

69,024

Fee-based sales commissions

 

 

46,799

 

 

 

 

 

 

 

 

 

 

 

 

46,799

Other fee-based services

 

 

31,229

 

 

 

 

 

 

 

 

 

 

 

 

31,229

Cost reimbursements

 

 

14,956

 

 

 

 

 

 

 

 

 

 

 

 

14,956

Trade sales

 

 

 

 

 

 

29,367

 

 

16,413

 

 

1,862

 

 

(10)

 

 

47,632

Sales of real estate inventory

 

 

 

 

19

 

 

 

 

 

 

 

 

 

 

19

Interest income

 

 

21,938

 

 

119

 

 

14

 

 

 

 

16

 

 

(491)

 

 

21,596

Net gains on sales of real estate

assets

 

 

 

 

2,221

 

 

 

 

 

 

 

 

 

 

2,221

Other revenue

 

 

 

 

298

 

 

114

 

 

 

 

482

 

 

(157)

 

 

737

Total revenues

 

 

183,946

 

 

2,657

 

 

29,495

 

 

16,413

 

 

2,360

 

 

(658)

 

 

234,213

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of VOIs sold

 

 

4,304

 

 

 

 

 

 

 

 

 

 

 

 

4,304

Cost of other fee-based services

 

 

20,402

 

 

 

 

 

 

 

 

 

 

 

 

20,402

Cost reimbursements

 

 

14,956

 

 

 

 

 

 

 

 

 

 

 

 

14,956

Cost of trade sales

 

 

 

 

 

 

18,841

 

 

13,254

 

 

657

 

 

(10)

 

 

32,742

Cost of real estate inventory sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

9,583

 

 

 

 

54

 

 

111

 

 

16

 

 

1,339

 

 

11,103

Recoveries from loan losses, net

 

 

 

 

(1,222)

 

 

 

 

 

 

 

 

 

 

(1,222)

Impairment losses

 

 

 

 

10

 

 

142

 

 

 

 

 

 

 

 

152

Selling, general and

administrative expenses

 

 

113,815

 

 

2,435

 

 

11,343

 

 

2,740

 

 

1,436

 

 

5,407

 

 

137,176

Total costs and expenses

 

 

163,060

 

 

1,223

 

 

30,380

 

 

16,105

 

 

2,109

 

 

6,736

 

 

219,613

Equity in net earnings of

unconsolidated real estate joint

ventures

 

 

 

 

622

 

 

 

 

 

 

 

 

 

 

622

Other (expense) income

 

 

(5,138)

 

 

(1)

 

 

44

 

 

 

 

7

 

 

96

 

 

(4,992)

Foreign exchange loss

 

 

 

 

 

 

 

 

(51)

 

 

 

 

 

 

(51)

Income (loss) before income

taxes

 

$

15,748

 

 

2,055

 

 

(841)

 

 

257

 

 

258

 

 

(7,298)

 

 

10,179

The following supplemental table presents BBX Capital’s Consolidating Statement of Operations (unaudited) for the three months ended December 31, 2018 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bluegreen

 

 

BBX

Capital

Real

Estate

 

 

BBX

Sweet

Holdings

 

 

Renin

 

 

Other

 

 

Reconciling

Items and

Eliminations

 

 

Segment

Total

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of VOIs

 

$

58,813

 

 

 

 

 

 

 

 

 

 

 

 

58,813

Fee-based sales commissions

 

 

48,841

 

 

 

 

 

 

 

 

 

 

 

 

48,841

Other fee-based services

 

 

28,552

 

 

 

 

 

 

 

 

 

 

 

 

28,552

Cost reimbursements

 

 

15,375

 

 

 

 

 

 

 

 

 

 

 

 

15,375

Trade sales

 

 

 

 

 

 

28,745

 

 

21,212

 

 

3,424

 

 

(9)

 

 

53,372

Sales of real estate inventory

 

 

 

 

4,633

 

 

 

 

 

 

 

 

 

 

4,633

Interest income

 

 

22,143

 

 

213

 

 

14

 

 

 

 

27

 

 

(634)

 

 

21,763

Net losses on sales of real estate

assets

 

 

 

 

(231)

 

 

 

 

 

 

 

 

 

 

(231)

Other revenue (expense)

 

 

 

 

589

 

 

(5)

 

 

 

 

424

 

 

(282)

 

 

726

Total revenues

 

 

173,724

 

 

5,204

 

 

28,754

 

 

21,212

 

 

3,875

 

 

(925)

 

 

231,844

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of VOIs sold

 

 

3,975

 

 

 

 

 

 

 

 

 

 

 

 

3,975

Cost of other fee-based services

 

 

18,986

 

 

 

 

 

 

 

 

 

 

 

 

18,986

Cost reimbursements

 

 

15,375

 

 

 

 

 

 

 

 

 

 

 

 

15,375

Cost of trade sales

 

 

 

 

 

 

19,122

 

 

17,029

 

 

1,453

 

 

(9)

 

 

37,595

Cost of real estate inventory sold

 

 

 

 

2,833

 

 

 

 

 

 

 

 

 

 

2,833

Interest expense

 

 

9,239

 

 

 

 

70

 

 

141

 

 

3

 

 

1,752

 

 

11,205

Recoveries from loan losses, net

 

 

 

 

(1,394)

 

 

 

 

 

 

 

 

 

 

(1,394)

Impairment losses

 

 

 

 

209

 

 

3,960

 

 

 

 

 

 

 

 

4,169

Reimbursements of litigation costs

and penalty

 

 

 

 

 

 

 

 

 

 

 

 

(600)

 

 

(600)

Selling, general and administrative

expenses

 

 

99,867

 

 

2,047

 

 

12,024

 

 

2,262

 

 

3,681

 

 

7,594

 

 

127,475

Total costs and expenses

 

 

147,442

 

 

3,695

 

 

35,176

 

 

19,432

 

 

5,137

 

 

8,737

 

 

219,619

Equity in net earnings of

unconsolidated real estate joint

ventures

 

 

 

 

13,029

 

 

 

 

 

 

 

 

 

 

13,029

Other (expense) income

 

 

(68)

 

 

39

 

 

24

 

 

 

 

9

 

 

74

 

 

78

Foreign exchange loss

 

 

 

 

 

 

 

 

(23)

 

 

 

 

 

 

(23)

Income (loss) before income

taxes

 

$

26,214

 

 

14,577

 

 

(6,398)

 

 

1,757

 

 

(1,253)

 

 

(9,588)

 

 

25,309

The following supplemental table presents BBX Capital’s Consolidating Statement of Operations (unaudited) for the year ended December 31, 2019 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bluegreen

 

 

BBX

Capital

Real

Estate

 

BBX Sweet

Holdings

 

Renin

 

Other

 

Reconciling

Items and

Eliminations

 

Segment

Total

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of VOIs

 

$

255,375

 

 

 

 

 

 

 

 

 

 

 

 

255,375

Fee-based sales commissions

 

 

207,832

 

 

 

 

 

 

 

 

 

 

 

 

207,832

Other fee-based services

 

 

125,244

 

 

 

 

 

 

 

 

 

 

 

 

125,244

Cost reimbursements

 

 

63,889

 

 

 

 

 

 

 

 

 

 

 

 

63,889

Trade sales

 

 

 

 

 

 

105,406

 

 

67,537

 

 

13,420

 

 

(26)

 

 

186,337

Sales of real estate inventory

 

 

 

 

5,049

 

 

 

 

 

 

 

 

 

 

5,049

Interest income

 

 

87,902

 

 

750

 

 

56

 

 

 

 

104

 

 

(2,486)

 

 

86,326

Net gains on sales of real estate

assets

 

 

 

 

13,616

 

 

 

 

 

 

 

 

 

 

13,616

Other revenue

 

 

 

 

1,619

 

 

324

 

 

 

 

2,233

 

 

(973)

 

 

3,203

Total revenues

 

 

740,242

 

 

21,034

 

 

105,786

 

 

67,537

 

 

15,757

 

 

(3,485)

 

 

946,871

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of VOIs sold

 

 

21,845

 

 

 

 

 

 

 

 

 

 

 

 

21,845

Cost of other fee-based services

 

 

86,940

 

 

 

 

 

 

 

 

 

 

 

 

86,940

Cost reimbursements

 

 

63,889

 

 

 

 

 

 

 

 

 

 

 

 

63,889

Cost of trade sales

 

 

 

 

 

 

67,703

 

 

54,243

 

 

5,800

 

 

(26)

 

 

127,720

Cost of real estate inventory sold

 

 

 

 

2,643

 

 

 

 

 

 

 

 

 

 

2,643

Interest expense

 

 

39,538

 

 

 

 

196

 

 

498

 

 

27

 

 

5,523

 

 

45,782

Recoveries from loan losses, net

 

 

 

 

(5,428)

 

 

 

 

 

 

 

 

 

 

(5,428)

Impairment losses

 

 

 

 

47

 

 

142

 

 

 

 

6,749

 

 

 

 

6,938

Selling, general and

administrative expenses

 

 

468,856

 

 

9,144

 

 

43,203

 

 

11,066

 

 

12,282

 

 

41,135

 

 

585,686

Total costs and expenses

 

 

681,068

 

 

6,406

 

 

111,244

 

 

65,807

 

 

24,858

 

 

46,632

 

 

936,015

Equity in net earnings of

unconsolidated real estate joint

ventures

 

 

 

 

37,898

 

 

 

 

 

 

 

 

 

 

37,898

Other (expense) income

 

 

(910)

 

 

170

 

 

336

 

 

153

 

 

15

 

 

318

 

 

82

Foreign exchange loss

 

 

 

 

 

 

 

 

(75)

 

 

 

 

 

 

(75)

Income (loss) before income

taxes

 

$

58,264

 

 

52,696

 

 

(5,122)

 

 

1,808

 

 

(9,086)

 

 

(49,799)

 

 

48,761

The following supplemental table presents BBX Capital’s Consolidating Statement of Operations (unaudited) for the year ended December 31, 2018 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bluegreen

 

BBX

Capital

Real Estate

 

BBX Sweet

Holdings

 

Renin

 

Other

 

Reconciling

Items and

Eliminations

 

Segment

Total

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of VOIs

 

$

254,225

 

 

 

 

 

 

 

 

 

 

 

 

254,225

Fee-based sales commissions

 

 

216,422

 

 

 

 

 

 

 

 

 

 

 

 

216,422

Other fee-based services

 

 

118,024

 

 

 

 

 

 

 

 

 

 

 

 

118,024

Cost reimbursements

 

 

62,534

 

 

 

 

 

 

 

 

 

 

 

 

62,534

Trade sales

 

 

 

 

 

 

101,187

 

 

68,417

 

 

9,903

 

 

(21)

 

 

179,486

Sales of real estate inventory

 

 

 

 

21,771

 

 

 

 

 

 

 

 

 

 

21,771

Interest income

 

 

85,914

 

 

2,277

 

 

61

 

 

 

 

87

 

 

(2,838)

 

 

85,501

Net gains on sales of real estate

assets

 

 

 

 

4,563

 

 

 

 

 

 

 

 

 

 

4,563

Other revenue

 

 

 

 

2,541

 

 

10

 

 

 

 

1,869

 

 

(1,048)

 

 

3,372

Total revenues

 

 

737,119

 

 

31,152

 

 

101,258

 

 

68,417

 

 

11,859

 

 

(3,907)

 

 

945,898

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of VOIs sold

 

 

23,813

 

 

 

 

 

 

 

 

 

 

 

 

23,813

Cost of other fee-based services

 

 

72,968

 

 

 

 

 

 

 

 

 

 

 

 

72,968

Cost reimbursements

 

 

62,534

 

 

 

 

 

 

 

 

 

 

 

 

62,534

Cost of trade sales

 

 

 

 

 

 

65,829

 

 

55,483

 

 

4,349

 

 

(21)

 

 

125,640

Cost of real estate inventory sold

 

 

 

 

14,116

 

 

 

 

 

 

 

 

 

 

14,116

Interest expense

 

 

34,709

 

 

 

 

308

 

 

638

 

 

7

 

 

6,413

 

 

42,075

Recoveries from loan losses, net

 

 

 

 

(8,653)

 

 

 

 

 

 

 

 

 

 

(8,653)

Impairment losses

 

 

 

 

571

 

 

4,147

 

 

 

 

 

 

 

 

4,718

Reimbursements of litigation costs

and penalty

 

 

 

 

 

 

 

 

 

 

 

 

(600)

 

 

(600)

Selling, general and administrative

expenses

 

 

415,403

 

 

9,210

 

 

46,130

 

 

9,903

 

 

11,680

 

 

45,486

 

 

537,812

Total costs and expenses

 

 

609,427

 

 

15,244

 

 

116,414

 

 

66,024

 

 

16,036

 

 

51,278

 

 

874,423

Equity in net earnings of

unconsolidated real estate joint

ventures

 

 

 

 

14,194

 

 

 

 

 

 

 

 

 

 

14,194

Other income (expense)

 

 

1,201

 

 

112

 

 

170

 

 

 

 

(1)

 

 

213

 

 

1,695

Foreign exchange gain

 

 

 

 

 

 

 

 

68

 

 

 

 

 

 

68

Income (loss) before income

taxes

 

$

128,893

 

 

30,214

 

 

(14,986)

 

 

2,461

 

 

(4,178)

 

 

(54,972)

 

 

87,432

The following supplemental table presents Bluegreen’s System-wide sales of VOIs (1) and a reconciliation of Bluegreen’s Sales of VOIs to its System-wide sales of VOIs (unaudited) (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Years Ended

 

 

December 31,

 

December 31,

 

 

2019

 

2018

 

2019

 

 

2018

Sales of VOIs

 

$

69,024

 

 

58,813

 

 

255,375

 

 

254,225

Provision for loan losses

 

 

16,218

 

 

15,379

 

 

55,701

 

 

51,305

Gross Sales of VOI's

 

 

85,242

 

 

74,192

 

 

311,076

 

 

305,530

Plus: Fee-based sales

 

 

70,239

 

 

71,767

 

 

308,032

 

 

318,540

System-wide sales of VOIs, net

 

$

155,481

 

 

145,959

 

 

619,108

 

 

624,070

(1)

System-wide Sales of VOIs is a non-GAAP measure and represents all sales of VOIs, whether owned by Bluegreen or a third party immediately prior to the sale. Sales of VOIs owned by third parties are transacted as sales of VOIs in Bluegreen’s Vacation Club through the same selling and marketing process it uses to sell its VOI inventory. Bluegreen considers system-wide sales of VOIs to be an important operating measure because it reflects all sales of VOIs by its sales and marketing operations without regard to whether Bluegreen or a third party owned such VOI inventory at the time of sale. System-wide sales of VOIs 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 results as reported under GAAP.

The following supplemental table presents BBX Capital’s free cash flow (2) and a reconciliation of cash flow from operating activities to free cash flow (unaudited) (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

For the Years Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

Cash flow from operating activities

 

$

17,848

 

 

43,052

 

 

78,242

 

 

86,639

Capital expenditures for property and equipment

 

 

(9,302)

 

 

(12,234)

 

 

(35,588)

 

 

(45,550)

Free cash flow

 

$

8,546

 

 

30,818

 

 

42,654

 

 

41,089

The following supplemental table presents Bluegreen’s free cash flow (2) and a reconciliation of Bluegreen’s cash flows from operating activities to its free cash flow (unaudited) (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

For the Years Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

Cash flow from operating activities

 

$

20,233

 

 

31,092

 

 

70,558

 

 

76,834

Capital expenditures for property and equipment

 

 

(5,973)

 

 

(8,192)

 

 

(24,475)

 

 

(32,539)

Free cash flow

 

$

14,260

 

 

22,900

 

 

46,083

 

 

44,295

(2)

Free cash flow is a non GAAP measure and is defined as cash provided by operating activities less capital expenditures for property and equipment. The Company and Bluegreen focus on the generation of free cash flow. The Company considers free cash flow to be a useful supplemental measure of the Company’s and Bluegreen’s ability to generate cash flow from operations and is a supplemental measure of liquidity. Free cash flow should not be considered as an alternative to cash flow from operating activities as a measure of its liquidity. The Company's computation of free cash flow may differ from the methodology utilized by other companies. Investors are cautioned that the items excluded from free cash flow are a significant component in understanding and assessing the Company’s financial performance.

The following supplemental table presents BBX Capital’s EBITDA and Adjusted EBITDA (3) and a reconciliation of BBX Capital’s net income to its EBITDA and Adjusted EBITDA (unaudited) (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Years Ended

 

 

December 31,

 

December 31,

 

 

2019

 

2018

 

2019

 

2018

Net income

 

$

8,589

 

 

15,667

 

 

32,103

 

 

55,793

Provision for income taxes

 

 

1,590

 

 

9,642

 

 

16,658

 

 

31,639

Income before income taxes

 

 

10,179

 

 

25,309

 

 

48,761

 

 

87,432

Add/(less):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (other than interest earned on VOI

 

 

 

 

 

 

 

 

 

 

 

 

notes receivable)

 

 

(1,412)

 

 

(1,441)

 

 

(5,615)

 

 

(5,631)

Interest expense

 

 

11,103

 

 

11,205

 

 

45,782

 

 

42,075

Interest expense on receivable-backed debt

 

 

(5,110)

 

 

(5,175)

 

 

(20,503)

 

 

(19,514)

Franchise taxes

 

 

22

 

 

19

 

 

193

 

 

199

Depreciation and amortization

 

 

5,201

 

 

5,776

 

 

22,302

 

 

21,788

EBITDA

 

 

19,983

 

 

35,693

 

 

90,920

 

 

126,349

EBITDA attributable to noncontrolling interests

 

 

(5,157)

 

 

(5,972)

 

 

(23,527)

 

 

(26,674)

Loss (gain) on assets held-for-sale

 

 

5,802

 

 

(6)

 

 

3,656

 

 

3

Foreign exchange loss (gain)

 

 

51

 

 

23

 

 

75

 

 

(68)

Corporate realignment (other)

 

 

 

 

3,961

 

 

 

 

6,027

Impairment losses - MOD Pizza

 

 

 

 

 

 

6,749

 

 

Severance

 

 

4,343

 

 

2,899

 

 

6,267

 

 

3,650

Bass Pro Settlement

 

 

 

 

 

 

39,121

 

 

Adjusted EBITDA

 

$

25,022

 

 

36,598

 

 

123,261

 

 

109,287

The following supplemental table presents Bluegreen’s EBITDA and Adjusted EBITDA(3) and a reconciliation of Bluegreen’s net income to its EBITDA and Adjusted EBITDA (unaudited) (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Years Ended

 

 

December 31,

 

December 31,

 

 

2019

 

2018

 

2019

 

2018

Net income

 

$

12,732

 

 

22,670

 

 

46,124

 

 

100,352

Provision for income taxes

 

 

3,016

 

 

3,544

 

 

12,140

 

 

28,541

Income before income taxes

 

 

15,748

 

 

26,214

 

 

58,264

 

 

128,893

Add/(less):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (other than interest earned on VOI

 

 

 

 

 

 

 

 

 

 

 

 

notes receivable)

 

 

(1,754)

 

 

(1,821)

 

 

(7,191)

 

 

(6,044)

Interest expense (other than interest expense on

 

 

 

 

 

 

 

 

 

 

 

 

receivable-back debt)

 

 

4,471

 

 

4,064

 

 

19,035

 

 

15,195

Franchise taxes

 

 

22

 

 

19

 

 

193

 

 

199

Depreciation and amortization

 

 

3,661

 

 

3,303

 

 

14,114

 

 

12,392

Bluegreen EBITDA

 

 

22,148

 

 

31,779

 

 

84,415

 

 

150,635

EBITDA attributable to the noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

in Bluegreen/Big Cedar Vacations

 

 

(2,330)

 

 

(2,947)

 

 

(11,670)

 

 

(12,468)

Loss (gain) on assets held-for-sale

 

 

5,802

 

 

(6)

 

 

3,656

 

 

3

Bass Pro Settlement

 

 

 

 

 

 

39,121

 

 

Severance

 

 

4,343

 

 

2,899

 

 

6,267

 

 

3,650

Adjusted EBITDA

 

$

29,963

 

 

31,725

 

 

121,789

 

 

141,820

The following supplemental table presents BBX Sweet Holdings’ EBITDA and Adjusted EBITDA (3) and a reconciliation of BBX Sweet Holdings’ net loss to its EBITDA and Adjusted EBITDA (unaudited) (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Years Ended

 

 

December 31,

 

December 31,

 

 

2019

 

2018

 

2019

 

2018

Net loss from BBX Sweet Holdings

 

$

(841)

 

 

(6,398)

 

$

(5,122)

 

 

(14,986)

Provision from income taxes

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(841)

 

 

(6,398)

 

 

(5,122)

 

 

(14,986)

Add/(less):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(14)

 

 

(14)

 

 

(56)

 

 

(61)

Interest expense

 

 

54

 

 

70

 

 

196

 

 

308

Depreciation and amortization

 

 

1,314

 

 

1,551

 

 

5,565

 

 

5,897

Corporate realignment and related impairment losses

 

 

 

 

3,961

 

 

 

 

6,027

EBITDA

 

 

513

 

 

(830)

 

 

583

 

 

(2,815)

EBITDA attributable to noncontrolling interests

 

 

54

 

 

96

 

 

(112)

 

 

(75)

Adjusted EBITDA

 

$

567

 

 

(734)

 

 

471

 

 

(2,890)

The following supplemental table presents Renin’s EBITDA and Adjusted EBITDA (3) and a reconciliation of Renin’s net income to its EBITDA and Adjusted EBITDA (unaudited) (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

For the Years Ended

 

 

December 31,

 

December 31,

 

 

2019

 

2018

 

2019

 

2018

Net income from Renin

 

$

332

 

 

1,082

 

$

1,213

 

 

1,610

(Benefit) provision from income taxes

 

 

(75)

 

 

675

 

 

595

 

 

851

Income before income taxes

 

 

257

 

 

1,757

 

 

1,808

 

 

2,461

Add:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

111

 

 

141

 

 

498

 

 

638

Depreciation and amortization

 

 

305

 

 

467

 

 

1,339

 

 

1,953

EBITDA

 

 

673

 

 

2,365

 

 

3,645

 

 

5,052

Foreign exchange loss (gain)

 

 

51

 

 

23

 

 

75

 

 

(68)

Adjusted EBITDA

 

$

724

 

 

2,388

 

$

3,720

 

 

4,984

(3)

The Company defines EBITDA as earnings or net income, before taking into account interest income (excluding interest earned on Bluegreen’s VOI notes receivable), interest expense (excluding interest expense incurred by Bluegreen on financings related to its receivable-backed notes payable), income and franchise taxes, and depreciation and amortization (including Renin’s amortization of product displays provided to customers for marketing purposes that are presented as a reduction of trade sales under GAAP). For purposes of the Company’s EBITDA calculations for BBX Capital and Bluegreen, no adjustments were made for interest income earned on Bluegreen’s 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 operations of Bluegreen’s business.

 

 

The Company defines Adjusted EBITDA as EBITDA adjusted for amounts attributable to noncontrolling interests, foreign exchange gains and losses (as exchange rates may vary significantly among companies), and items that the Company believes are not representative of ongoing operating results, including restructuring charges and goodwill impairment losses. Accordingly, amounts paid, accrued, or incurred in connection with the Bass Pro settlement in June 2019 were excluded in the computation of BBX Capital’s and Bluegreen’s Adjusted EBITDA for the year ended December 31, 2019. In addition, impairments of property and equipment and intangible assets related to the Company’s MOD Pizza restaurant locations were excluded in the computation of the Company’s Adjusted EBITDA in the applicable 2019 periods.

 

 

The Company considers EBITDA and Adjusted EBITDA to be an indicator of the operating performance of BBX Capital, Bluegreen, BBX Sweet Holdings, and Renin, and they are used to measure their ability to service debt, fund capital expenditures, and expand its businesses. EBITDA is also used by companies, lenders, investors and others because it excludes 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. Additionally, 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 also excludes 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 related depreciation and amortization expense among companies.

 

 

The Company considers Adjusted EBITDA to be a useful supplemental measure of the operating performance of BBX Capital, Bluegreen, BBX Sweet Holdings, and Renin that facilitates the comparability of historical financial periods. EBITDA and Adjusted EBITDA should not be considered as an alternative to net income as an indicator of the financial performance of BBX Capital, Bluegreen, BBX Sweet Holdings, and Renin or as an alternative to cash flow from operating activities as a measure of its liquidity. The Company's computation of EBITDA and Adjusted EBITDA may differ from the methodology utilized by other companies. Investors are cautioned that items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing the financial performance of BBX Capital, Bluegreen, BBX Sweet Holdings, and Renin.

 

BBX Capital Corporation Contact Info
Investor Relations Contact:
Leo Hinkley, Managing Director, Investor Relations Officer
954-940-5300, Email: LHinkley@BBXCapital.com

Media Relations Contacts:
Kip Hunter Marketing, Nicole Lewis / Shannon O’Malley
954-765-1329, Email: nicole@kiphuntermarketing.com, shannon@kiphuntermarketing.com

Source: BBX Capital Corporation