bbxi20230817

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarter Ended September 30, 2023

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number

000-56177

BBX Capital, Inc.

(Exact name of registrant as specified in its charter)

Florida		82-4669146
(State or other jurisdiction of incorporation or organization)		(I.R.S Employer Identification No.)

201 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, Florida		33301
(Address of principal executive office)		(Zip Code)

(954) 940-4900

(Registrant's telephone number, including area code)

Securities Registered pursuant to Section 12(b) of the Act:

None

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☒	Non-accelerated filer ☐	Smaller reporting company ☒
Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

The number of shares outstanding of each of the registrant’s classes of common stock as of November 3, 2023 is as follows:

Class A Common Stock of $.01 par value, 11,296,307 shares outstanding.
Class B Common Stock of $.01 par value, 3,860,055 shares outstanding.

	*September 30,*		*December 31,*
	*2023*		*2022*
ASSETS
Cash and cash equivalents ($3,550 in 2023 in variable interest entities (VIEs))	$	102,490		127,581
Restricted cash ($10,369 in 2023 in VIEs)		22,072		750
Securities available for sale, at fair value		44,899		18,548
Trade accounts receivable, net		20,098		19,665
Construction contracts receivable, net		13,743		—
Trade inventory, net		40,336		48,866
Real estate ($3,874 in 2023 and $4,443 in 2022 held for sale and $53,605 in 2023 in VIEs)		70,101		12,345
Investments in and advances to unconsolidated real estate joint ventures ($39,453 in 2023 in VIEs)		43,610		49,415
Note receivable from Bluegreen Vacations Holding Corporation		35,000		50,000
Property and equipment, net		38,564		35,140
Goodwill		49,614		18,414
Intangible assets, net		27,476		29,405
Operating lease assets		116,759		110,082
Deferred tax asset, net		2,734		4,259
Contract assets		32,719		16,918
Other assets ($1,223 in 2023 in VIEs)		20,790		21,453
Total assets	$	681,005		562,841
LIABILITIES AND EQUITY
Liabilities:
Accounts payable	$	43,920		17,371
Accrued expenses ($301 in 2023 in VIEs)		34,177		34,985
Contract liabilities		30,457		861
Other liabilities		3,600		5,297
Operating lease liabilities		134,719		126,842
Notes payable and other borrowings ($5,358 in 2023 in VIEs)		44,847		38,543
Total liabilities		291,720		223,899
Commitments and contingencies (See Note 14)
Redeemable noncontrolling interest		5,180		4,414
Equity:
Class A Common Stock of $0.01 par value; authorized 30,000,000 shares; issued and outstanding 10,630,176 in 2023 and 10,629,613 in 2022		106		106
Class B Common Stock of $0.01 par value; authorized 4,000,000 shares; issued and outstanding 3,723,369 in 2023 and 3,723,932 in 2022		37		37
Additional paid-in capital		316,346		312,978
Accumulated earnings		12,039		20,358
Accumulated other comprehensive income		851		823
Total shareholders' equity		329,379		334,302
Noncontrolling interests		54,726		226
Total equity		384,105		334,528
Total liabilities and equity	$	681,005		562,841

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income – Unaudited

	*For the Three Months Ended*						*For the Nine Months Ended*
	*September 30,*						*September 30,*
	*2023*			*2022*			*2023*			*2022*
Revenues:
Trade sales	$	61,462			71,097			186,379			209,431
Sales of real estate inventory		2,712			1,606			8,929			16,813
Revenue from construction contracts		29,067			—			90,678			—
Real estate development and property management fees		5,002			—			9,249			—
Interest income		2,545			1,576			6,736			3,968
Net gain on sales of real estate assets		2,271			—			2,210			1,329
Other revenue		280			955			939			2,862
Total revenues		103,339			75,234			305,120			234,403
Costs and expenses:
Cost of trade sales		45,307			54,057			137,641			160,661
Cost of real estate inventory sold		570			556			2,107			6,669
Cost of revenue from construction contracts		31,945			—			94,263			—
Interest expense		810			615			2,245			1,660
Recoveries from loan losses, net		(177	)		(278	)		(3,284	)		(4,215	)
Impairment losses		349			311			349			375
Selling, general and administrative expenses		34,120			29,073			102,143			86,498
Total costs and expenses		112,924			84,334			335,464			251,648
Operating losses		(9,585	)		(9,100	)		(30,344	)		(17,245	)
Equity in net earnings of unconsolidated real estate joint ventures		2,126			15,026			3,958			35,712
(Loss) gain on the consolidation of The Altman Companies		(2,393	)		—			3,802			—
Gain on the consolidation of investment in real estate joint ventures		1,135			—			12,017			—
Other income (expense)		1,155			(310	)		4,042			777
Foreign exchange gain (loss)		421			903			(113	)		1,071
(Loss) income before income taxes		(7,141	)		6,519			(6,638	)		20,315
Benefit (provision) for income taxes		606			(2,519	)		231			(7,852	)
Net (loss) income		(6,535	)		4,000			(6,407	)		12,463
Net (income) loss attributable to noncontrolling interests		(1,290	)		24			(1,516	)		200
Net (loss) income attributable to shareholders	$	(7,825	)		4,024			(7,923	)		12,663
Basic (loss) earnings per share	$	(0.55	)		0.26			(0.55	)		0.82
Diluted (loss) earnings per share	$	(0.55	)		0.26			(0.56	)		0.82
Basic weighted average number of common shares outstanding		14,354			15,409			14,354			15,452
Diluted weighted average number of common shares outstanding		14,354			15,494			14,354			15,491
Net (loss) income	$	(6,535	)		4,000			(6,407	)		12,463
Other comprehensive income (loss), net of tax:
Unrealized loss on securities available for sale		(12	)		(61	)		(8	)		(152	)
Foreign currency translation adjustments		(338	)		(838	)		36			(1,052	)
Other comprehensive (loss) income, net		(350	)		(899	)		28			(1,204	)
Comprehensive (loss) income, net of tax		(6,885	)		3,101			(6,379	)		11,259
Comprehensive (income) loss attributable to noncontrolling interests		(1,290	)		24			(1,516	)		200
Comprehensive (loss) income attributable to shareholders	$	(8,175	)		3,125			(7,895	)		11,459

See Notes to Condensed Consolidated Financial Statements – Unaudited

	*Shares of*															*Accumulated*
	*Common Stock*					*Common*										*Other*
	*Outstanding*					*Stock*					*Additional*					*Comprehen-*			*Non-*
	*Class*					*Class*					*Paid-in*		*Accumulated*			*sive*			*controlling*			*Total*
	A			B		A			B		*Capital*		*Earnings*			*Income*			*Interests*			*Equity*
Balance, June 30, 2022		11,792			3,667	$	118			37		312,299		17,439			1,531			730			332,154
Net income excluding $84 of income attributable to redeemable noncontrolling interest		—			—		—			—		—		4,024			—			(108	)		3,916
Other comprehensive loss		—			—		—			—		—		—			(899	)		—			(899	)
Accretion of redeemable noncontrolling interest		—			—		—			—		—		(270	)		—			—			(270	)
Contributions from noncontrolling interest		—			—		—			—		—		—			—			25			25
Distributions to noncontrolling interests		—			—		—			—		—		—			—			(18	)		(18	)
Purchase and retirement of common stock		(100	)		—		(1	)		—		—		(952	)		—			—			(953	)
Share-based compensation		—			—		—			—		965		—			—			—			965
Balance, September 30, 2022		11,692			3,667	$	117			37		313,264		20,241			632			629			334,920

	*Shares of*
	*Common Stock*					*Common*										*Accumulated*
	*Outstanding*					*Stock*				*Additional*						*Other*			*Non-*
	*Class*					*Class*				*Paid-in*			*Accumulated*			*Comprehensive*			*controlling*			*Total*
	A		B			A		B		*Capital*			*Earnings*			*Income*			*Interests*			*Equity*
Balance, June 30, 2023		10,629		3,724		$	106		37		315,108			19,864			1,201			58,762			395,078
Net loss excluding $173 of income attributable to redeemable noncontrolling interest		—		—			—		—		—			(7,825	)		—			1,117			(6,708	)
Other comprehensive loss		—		—			—		—		—			—			(350	)		—			(350	)
Buyout of redeemable noncontrolling interest		—		—			—		—		311			—			—			—			311
Consolidation of real estate joint venture managing members		—		—			—		—		—			—			—			(434	)		(434	)
Contributions from noncontrolling interests		—		—			—		—		—			—			—			190			190
Distributions to noncontrolling interests		—		—			—		—		(197	)		—			—			(5,314	)		(5,511	)
Conversion of common stock from Class B to Class A		1		(1	)		—		—		—			—			—			—			—
Share-based compensation		—		—			—		—		1,124			—			—			405			1,529
Balance, September 30, 2023		10,630		3,723		$	106		37		316,346			12,039			851			54,726			384,105

	Shares of																Accumulated
	Common Stock						Common										Other
	Outstanding						Stock					Additional					Comprehen-			Non-
	Class						Class					Paid-in		Accumulated			sive			controlling			Total
	A			B			A			B		Capital		Earnings			Income			Interests			Equity
Balance, December 31, 2021		11,804			3,671		$	118			37		310,588		9,226			1,836			1,143			322,948
Net income excluding $95 of income attributable to redeemable noncontrolling interest		—			—			—			—		—		12,663			—			(295	)		12,368
Other comprehensive loss		—			—			—			—		—		—			(1,204	)		—			(1,204	)
Accretion of noncontrolling interest		—			—			—			—		—		(575	)		—			—			(575	)
Contributions from noncontrolling interest		—			—			—			—		—		—			—			50			50
Distributions to noncontrolling interests		—			—			—			—		—		—			—			(269	)		(269	)
Purchase and retirement of common stock		(116	)		—			(1	)		—		—		(1,073	)		—			—			(1,074	)
Conversion of common stock from Class B to Class A		4			(4	)		—			—		—		—			—			—			—
Share-based compensation		—			—			—			—		2,676		—			—			—			2,676
Balance, September 30, 2022		11,692			3,667		$	117			37		313,264		20,241			632			629			334,920

	*Shares of*
	*Common Stock*					*Common*										*Accumulated*
	*Outstanding*					*Stock*				*Additional*						*Other*		*Non-*
	*Class*					*Class*				*Paid-in*			*Accumulated*			*Comprehensive*		*controlling*			*Total*
	A		B			A		B		*Capital*			*Earnings*			*Income*		*Interests*			*Equity*
Balance, December 31, 2022		10,629		3,724		$	106		37		312,978			20,358			823		226			334,528
Net loss excluding $90 of income attributable to redeemable noncontrolling interest		—		—			—		—		—			(7,923	)		—		1,426			(6,497	)
Other comprehensive income		—		—			—		—		—			—			28		—			28
Accretion of redeemable noncontrolling interest		—		—			—		—		—			(900	)		—		—			(900	)
Reversal of accretion of redeemable noncontrolling interest		—		—			—		—		—			504			—		—			504
Consolidation of real estate joint venture managing members		—		—			—		—		—			—			—		55,556			55,556
Contributions from noncontrolling interests		—		—			—		—		—			—			—		2,337			2,337
Distributions to noncontrolling interests		—		—			—		—		(197	)		—			—		(5,473	)		(5,670	)
Buyout of redeemable noncontrolling interest		—		—			—		—		311			—			—		—			311
Conversion of common stock from Class B to Class A		1		(1	)		—		—		—			—			—		—			—
Share-based compensation		—		—			—		—		3,254			—			—		654			3,908
Balance, September 30, 2023		10,630		3,723		$	106		37		316,346			12,039			851		54,726			384,105

	*For the Nine Months Ended*
	*September 30,*
	*2023*			*2022*
Operating activities:
Net (loss) income	$	(6,407	)		12,463
Adjustments to reconcile net income to net cash provided by operating activities:
Recoveries from loan losses, net		(3,284	)		(4,215	)
Depreciation, amortization and accretion		8,542			7,705
Net gain on sales of real estate and property and equipment		(2,209	)		(1,592	)
Equity in net earnings of unconsolidated real estate joint ventures		(3,958	)		(35,712	)
Return on investment in unconsolidated real estate joint ventures		7,455			38,197
Gain on the consolidation of real estate joint ventures		(12,017	)		—
Gain on the consolidation of The Altman Companies		(3,802	)		—
Impairment losses		349			375
Share-based compensation expense		3,976			2,712
Recovery for excess and obsolete inventory		(392	)		(1,012	)
Changes in operating assets and liabilities:
Deferred income tax asset, net		1,525			(870	)
Trade accounts receivable		283			6,373
Construction contracts receivable		978			—
Trade inventory		8,922			(11,589	)
Real estate		(2,995	)		580
Operating lease assets and operating lease liabilities		734			964
Contract assets		6,393			5,277
Other assets		5,569			(561	)
Accounts payable		9,769			5,517
Accrued expenses		(10,915	)		(7,166	)
Contract liabilities		(963	)		—
Other liabilities		(2,129	)		(525	)
Net cash provided by operating activities		5,424			16,921
Investing activities:
Return of investment in and advances to unconsolidated real estate joint ventures		21,188			10,648
Investments in unconsolidated real estate joint ventures		(10,752	)		(5,623	)
Purchases of securities available for sale		(95,008	)		(32,809	)
Redemptions of securities available for sale		70,229			230
Proceeds from repayment of loans receivable		3,622			4,442
Proceeds from sales of real estate held-for-sale		3,176			3,937
Proceeds from sales of property and equipment		—			2,741
Proceeds from the repayment of Bluegreen Vacations note receivable		14,070			—
Additions to real estate held-for-sale and held-for-investment		(29,345	)		(382	)
Purchases of property and equipment		(10,925	)		(10,061	)
Cash acquired in the consolidation of real estate joint ventures		29,147			—
Cash paid for The Altman Companies acquisition, net of cash received		(3,975	)		—
Decrease in cash from other investing activities		(14	)		(10	)
Net cash used in investing activities		(8,587	)		(26,887	)

BBX Capital, Inc. TABLE OF CONTENTS

Part I.
Item 1.	Financial Statements

	Condensed Consolidated Statements of Financial Condition as of September 30, 2023 and December 31, 2022 - Unaudited	1
	Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2023 and 2022 - Unaudited	2
	Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2023 and 2022 - Unaudited	3
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 - Unaudited	5
	Notes to Condensed Consolidated Financial Statements - Unaudited	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	60
Item 4.	Controls and Procedures	60

Part II.	OTHER INFORMATION

Item 1.	Legal Proceedings	60
Item 1A.	Risk Factors	60
Item 6.	Exhibits	61
	Signatures	62

	*For the Nine Months Ended*
	*September 30,*
	*2023*			*2022*
Financing activities:
Repayments of notes payable and other borrowings		(5,317	)		(15,049	)
Proceeds from notes payable and other borrowings		11,334