bbxi20240630

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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 June 30, 2024

☐ 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 August 6, 2024 is as follows:

Class A Common Stock of $.01 par value, 10,486,944 shares outstanding.
Class B Common Stock of $.01 par value, 3,854,194 shares outstanding.

Table of Contents

BBX Capital, Inc. TABLE OF CONTENTS

Part I.
Item 1.	Financial Statements

	Condensed Consolidated Statements of Financial Condition as of June 30, 2024 and December 31, 2023 - Unaudited	1
	Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and Six Months Ended June 30, 2024 and 2023 - Unaudited	2
	Condensed Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2024 and 2023 - Unaudited	3
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 - Unaudited	5
	Notes to Condensed Consolidated Financial Statements - Unaudited	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	52
Item 4.	Controls and Procedures	52

Part II.	OTHER INFORMATION

Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 6.	Exhibits	53
	Signatures	54

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BBX Capital, Inc.

Condensed Consolidated Statements of Financial Condition - Unaudited

(In thousands, except share data)

	*June 30,*			*December 31,*
	*2024*			*2023*
ASSETS
Cash and cash equivalents ($3,756 in 2024 and $4,521 in 2023 in variable interest entities (VIEs))	$	116,049			90,277
Restricted cash ($10,186 in 2024 and $10,089 in 2023 in VIEs)		25,729			21,307
Securities available for sale, at fair value		10,808			44,576
Trade accounts receivable, net ($377 in 2024 and $385 in 2023 in VIEs)		16,501			18,341
Construction contracts receivable, net		7,049			13,525
Trade inventory, net		33,850			33,836
Real estate ($2,477 in 2024 and $2,688 in 2023 held for sale, and $88,925 in 2024 and $64,055 in 2023 rental property under development in VIEs and $1,690 in predevelopment costs in 2024 in VIEs)		107,530			80,654
Investments in and advances to unconsolidated real estate joint ventures ($46,168 in 2024 and $39,821 in 2023 in VIEs)		48,172			44,076
Note receivable from Bluegreen Vacations Holding Corporation		—			35,000
Property and equipment, net		40,264			40,688
Goodwill		49,647			49,647
Intangible assets, net		25,582			26,839
Operating lease assets		118,001			117,894
Deferred tax asset, net		7,151			7,192
Contract assets		16,735			30,799
Other assets ($1,406 in 2024 and $990 in 2023 in VIEs)		22,582			19,591
Total assets	$	645,650			674,242
LIABILITIES AND EQUITY
Liabilities:
Accounts payable ($128 in 2024 and $16 in 2023 in VIEs)	$	24,260			31,012
Accrued expenses ($539 in 2024 and $349 in 2023 in VIEs)		32,822			40,700
Contract liabilities		21,844			28,641
Other liabilities ($55 in 2024 and $1,833 in 2023 in VIEs)		3,660			4,774
Operating lease liabilities		137,940			136,758
Notes payable and other borrowings ($48,654 in 2024 and $27,321 in 2023 in VIEs)		76,313			60,805
Total liabilities		296,839			302,690
Commitments and contingencies (See Note 14)
Redeemable noncontrolling interest		5,091			5,040
Equity:
Class A Common Stock of $0.01 par value; authorized 30,000,000 shares; issued and outstanding 9,610,336 in 2024 and 10,110,336 in 2023		96			101
Class B Common Stock of $0.01 par value; authorized 4,000,000 shares; issued and outstanding 3,785,851 in 2024 and 3,785,851 in 2023		38			38
Additional paid-in capital		310,228			311,847
Accumulated deficit		(24,770	)		(1,755	)
Accumulated other comprehensive income		593			1,313
Total shareholders' equity		286,185			311,544
Noncontrolling interests		57,535			54,968
Total equity		343,720			366,512
Total liabilities and equity	$	645,650			674,242

(1) BBX Capital's Class B Common Stock is convertible into its Class A Common Stock on a share for share basis at any time at the option of the holder.

See Notes to Condensed Consolidated Financial Statements - Unaudited

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BBX Capital, Inc.

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

(In thousands, except per share data)

	*For the Three Months Ended*						*For the Six Months Ended*
	*June 30,*						*June 30,*
	*2024*			*2023*			*2024*			*2023*
Revenues:
Trade sales	$	55,967			61,203			114,412			124,917
Sales of real estate inventory		629			4,445			1,953			6,217
Revenue from construction contracts		14,957			36,574			31,404			61,611
Real estate development and property management fees		1,734			2,636			4,000			4,247
Interest income		1,867			1,674			3,963			4,191
Other revenue		68			312			457			659
Total revenues		75,222			106,844			156,189			201,842
Costs and expenses:
Cost of trade sales		40,441			44,927			81,992			92,334
Cost of real estate inventory sold		—			959			321			1,537
Cost of revenue from construction contracts		15,432			38,129			35,638			62,318
Interest expense		639			700			1,508			1,435
Recoveries from loan losses, net		(247	)		(2,507	)		(824	)		(3,107	)
Impairment losses		218			—			218			—
Selling, general and administrative expenses		33,306			34,306			68,719			68,084
Total costs and expenses		89,789			116,514			187,572			222,601
Operating losses		(14,567	)		(9,670	)		(31,383	)		(20,759	)
Equity in net earnings of unconsolidated real estate joint ventures		1,676			728			1,717			1,832
Gain on the consolidation of The Altman Companies		—			—			—			6,195
Gain on the consolidation of investment in real estate joint ventures		—			27			—			10,882
Other income		489			716			1,434			2,887
Foreign exchange gain (loss)		235			(488	)		706			(534	)
(Loss) income before income taxes		(12,167	)		(8,687	)		(27,526	)		503
Benefit (provision) for income taxes		2,358			1,292			5,065			(375	)
Net (loss) income		(9,809	)		(7,395	)		(22,461	)		128
Net income attributable to noncontrolling interests		(170	)		(606	)		(554	)		(226	)
Net loss attributable to shareholders	$	(9,979	)		(8,001	)		(23,015	)		(98	)
Basic loss per share	$	(0.74	)		(0.56	)		(1.68	)		(0.01	)
Diluted loss per share	$	(0.74	)		(0.56	)		(1.68	)		(0.01	)
Basic weighted average number of common shares outstanding		13,561			14,354			13,729			14,354
Diluted weighted average number of common shares outstanding		13,561			14,354			13,729			14,354
Net (loss) income	$	(9,809	)		(7,395	)		(22,461	)		128
Other comprehensive (loss) income, net of tax:
Unrealized (loss) gain on securities available for sale		—			(23	)		(7	)		4
Foreign currency translation adjustments		(167	)		363			(713	)		374
Other comprehensive (loss) income, net		(167	)		340			(720	)		378
Comprehensive (loss) income, net of tax		(9,976	)		(7,055	)		(23,181	)		506
Comprehensive income attributable to noncontrolling interests		(170	)		(606	)		(554	)		(226	)
Comprehensive (loss) income attributable to shareholders	$	(10,146	)		(7,661	)		(23,735	)		280

See Notes to Condensed Consolidated Financial Statements – Unaudited

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BBX Capital, Inc.

Condensed Consolidated Statements of Changes in Equity - Unaudited

For the Three Months Ended June 30, 2024 and 2023

(In thousands)

	*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, March 31, 2023		10,629		3,724	$	106		37		313,995		27,361			861		56,749		399,109
Net loss excluding $122 of income attributable to redeemable noncontrolling interest		—		—		—		—		—		(8,001	)		—		484		(7,517	)
Other comprehensive income		—		—		—		—		—		—			340		—		340
Reversal of accretion of redeemable noncontrolling interest		—		—		—		—		—		504			—		—		504
Contributions from noncontrolling interest		—		—		—		—		—		—			—		1,390		1,390
Share-based compensation		—		—		—		—		1,113		—			—		139		1,252
Balance, June 30, 2023		10,629		3,724	$	106		37		315,108		19,864			1,201		58,762		395,078

	*Shares of*
	*Common Stock*					*Common*											*Accumulated*
	*Outstanding*					*Stock*					*Additional*						*Other*			*Non-*
	*Class*					*Class*					*Paid-in*			*Accumulated*			*Comprehensive*			*controlling*		*Total*
	A			B		A			B		*Capital*			*Deficit*			*Income*			*Interests*		*Equity*
Balance, March 31, 2024		10,110			3,786	$	101			38		313,190			(14,791	)		760			56,215		355,513
Net loss excluding $65 of income attributable to redeemable noncontrolling interest		—			—		—			—		—			(9,979	)		—			105		(9,874	)
Other comprehensive loss		—			—		—			—		—			—			(167	)		—		(167	)
Contributions from noncontrolling interests		—			—		—			—		—			—			—			1,207		1,207
Purchase and retirement of common stock		(500	)		—		(5	)		—		(4,370	)		—			—			—		(4,375	)
Share-based compensation		—			—		—			—		1,408			—			—			8		1,416
Balance, June 30, 2024		9,610			3,786	$	96			38		310,228			(24,770	)		593			57,535		343,720

See Notes to Condensed Consolidated Financial Statements - Unaudited

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BBX Capital, Inc.

Condensed Consolidated Statements of Changes in Equity - Unaudited

For the Six Months Ended June 30, 2024 and 2023

(In thousands)

	*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, 2022		10,629		3,724	$	106		37		312,978		20,358			823		226			334,528
Net income excluding $83 of loss attributable to redeemable noncontrolling interest		—		—		—		—		—		(98	)		—		309			211
Other comprehensive income		—		—		—		—		—		—			378		—			378
Accretion of noncontrolling interest		—		—		—		—		—		(900	)		—		—			(900	)
Reversal of accretion of redeemable noncontrolling interest		—		—		—		—		—		504			—		—			504
Consolidation of real estate joint venture managing members		—		—		—		—		—		—			—		55,990			55,990
Contributions from noncontrolling interest		—		—		—		—		—		—			—		2,147			2,147
Distributions to noncontrolling interests		—		—		—		—		—		—			—		(159	)		(159	)
Share-based compensation		—		—		—		—		2,130		—			—		249			2,379
Balance, June 30, 2023		10,629		3,724	$	106		37		315,108		19,864			1,201		58,762			395,078

	*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, 2023		10,110			3,786	$	101			38		311,847			(1,755	)		1,313			54,968			366,512
Net loss excluding $129 of income attributable to redeemable noncontrolling interest		—			—		—			—		—			(23,015	)		—			425			(22,590	)
Other comprehensive loss		—			—		—			—		—			—			(720	)		—			(720	)
Contributions from noncontrolling interests		—			—		—			—		—			—			—			1,860			1,860
Distributions to noncontrolling interests		—			—		—			—		—			—			—			(69	)		(69	)
Purchase and retirement of common stock from common stock		(500	)		—		(5	)		—		(4,370	)		—			—			—			(4,375	)
Share-based compensation		—			—		—			—		2,751			—			—			351			3,102
Balance, June 30, 2024		9,610			3,786	$	96			38		310,228			(24,770	)		593			57,535			343,720

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BBX Capital, Inc.

Condensed Consolidated Statements of Cash Flows - Unaudited

(In thousands)

	*For the Six Months Ended*
	*June 30,*
	*2024*			*2023*
Operating activities:
Net (loss) income	$	(22,461	)		128
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Recoveries from loan losses, net		(824	)		(3,107	)
Depreciation, amortization and accretion		5,450			6,282
Net (gain) loss on sales of real estate and property and equipment		(501	)		91
Equity in net earnings of unconsolidated real estate joint ventures		(1,717	)		(1,832	)
Return on investment in unconsolidated real estate joint ventures		3,432			2,464
Gain on the consolidation of real estate joint ventures		—			(10,882	)
Gain on the consolidation of The Altman Companies		—			(6,195	)
Impairment losses		218			—
Share-based compensation expense		3,102			2,403
Provision for excess and obsolete inventory		423			271
Change in deferred income tax asset, net		41			1,753
Changes in operating assets and liabilities:
Trade accounts receivable		1,840			(416	)
Construction contracts receivable		6,476			4,024
Trade inventory		(498	)		6,111
Real estate		(2,610	)		1,230
Operating lease assets		10,869			10,365
Operating lease liabilities		(10,913	)		(9,544	)
Contract assets		14,319			5,514
Other assets		3,572			9,268
Accounts payable		(11,648	)		(13,018	)
Accrued expenses		(7,878	)		(15,276	)
Contract liabilities		(10,633	)		2,991
Other liabilities		(1,827	)		(569	)
Net cash used in operating activities		(21,768	)		(7,944	)
Investing activities:
Return of investment in and advances to unconsolidated real estate joint ventures		401			2,353
Investments in unconsolidated real estate joint ventures		(6,212	)		(6,766	)
Purchases of securities available for sale		(9,831	)		(68,862	)
Redemptions of securities available for sale		44,251			26,800
Proceeds from repayment of loans receivable		857			3,462
Proceeds from the repayment of Bluegreen Vacations Holding Corporation note		35,000			14,070
Proceeds from sales of assets		306			—
Proceeds from sale of real estate held for sale		260			—
Additions to real estate held-for-sale and held-for-investment		(16,376	)		(9,299	)
Purchases of property and equipment		(3,955	)		(9,060	)
Cash acquired in the consolidation of real estate joint ventures		—			29,147
Cash paid for The Altman Companies acquisition, net of cash received		—			(3,945	)
Decrease in cash from other investing activities		(5,008	)		(9	)
Net cash provided by (used in) investing activities		39,693			(22,109	)

(Continued)

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	*For the Six Months Ended*
	*June 30,*
	*2024*			*2023*
Financing activities:
Repayments of notes payable and other borrowings		(8,271	)		(7,435	)
Proceeds from notes payable and other borrowings		23,877			5,501
Payments for debt issuance costs		(675	)		(109	)
Purchase and retirement of common stock		(4,375	)		—
Contributions from noncontrolling interests		1,860			2,147
Distributions to noncontrolling interests		(147	)		(159	)
Net cash provided by (used in) financing activities		12,269			(55	)
Increase (decrease) in cash, cash equivalents and restricted cash		30,194			(30,108	)
Cash, cash equivalents and restricted cash at beginning of period		111,584			128,331
Cash, cash equivalents and restricted cash at end of period	$	141,778			98,223

Supplemental cash flow information:
Interest paid on borrowings, net of amounts capitalized	$	1,685			1,359
Income taxes paid		485			7,213
Supplementary disclosure of non-cash investing and financing activities:
Miscellaneous receivable from sale of assets		255			—
Additions to real estate held for investment and property and equipment accrued not paid		8,732			4,403
Inventory transferred in sale of assets		61			—
Assumption of Community Development District Bonds by homebuilders		134			954
Operating lease assets obtained in exchange for new operating lease liabilities		12,457			18,688
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents		116,049			81,469
Restricted cash		25,729			16,754
Total cash, cash equivalents and restricted cash	$	141,778			98,223

See Notes to Condensed Consolidated Financial Statements - Unaudited

Table of Contents

BBX Capital, Inc.

Notes to Condensed Consolidated Financial Statements - Unaudited

1. Organization and Basis of Financial Statement Presentation

Organization

BBX Capital, Inc. (referred to together with its subsidiaries as the “Company,” “we,” “us,” or “our,” and without its subsidiaries as “BBX Capital”) is a Florida-based diversified holding company whose principal holdings are BBX Capital Real Estate LLC (“BBX Capital Real Estate” or “BBXRE”), BBX Sweet Holdings, LLC (“BBX Sweet Holdings” or “BBXSH”), and Renin Holdings, LLC (“Renin”).

Principal Holdings

The Company’s principal holdings are BBX Capital Real Estate, BBX Sweet Holdings, and Renin.

BBX Capital Real Estate

BBX Capital Real Estate is primarily engaged in the acquisition, development, and sale of multifamily rental apartment communities, warehouse and logistics facilities, and single-family master-planned housing communities located primarily in Florida. As part of its real estate development activities, BBX Capital Real Estate invests in developments primarily through joint ventures in which it serves as the managing member, and BBX Capital Real Estate also generates fees from various services related to these developments, including acquisition, development management, general contractor, and property management services. Since November 2018, BBX Capital Real Estate has owned a 50% equity interest in The Altman Companies, LLC (the “Altman Companies”), a development and manager of multifamily apartment communities, and in January 2023, BBX Capital Real Estate acquired the remaining equity interests in the Altman Companies. In 2021, BBX Capital Real Estate also established BBX Logistics Properties, LLC ("BBX Logistics"), a developer of warehouse and logistics facilities. In addition, BBX Capital Real Estate manages the legacy assets acquired in connection with the Company’s sale of BankAtlantic in 2012, including portfolios of loans receivable, real estate properties, and judgments against past borrowers.

BBX Sweet Holdings

BBX Sweet Holdings is engaged in the ownership and management of operating businesses in the confectionery industry, including (i) IT’SUGAR, a specialty candy retailer in over 100 retail locations in the United States and one location in Canada whose products include bulk candy, candy in giant packaging, and licensed and novelty items, and (ii) Las Olas Confections and Snacks, a manufacturer and wholesaler of chocolate and other confectionery products. Through August 2023, the Company owned over 90% of the equity interests in IT'SUGAR. In August 2023, the Company acquired the remaining equity interest in IT’SUGAR, and IT’SUGAR became a wholly-owned subsidiary of the Company.

Renin

Renin is engaged in the design, manufacture, and distribution of sliding doors, door systems and hardware, and home décor products and operates through its headquarters in Canada and manufacturing and distribution facilities in the United States and Canada. In addition to its own manufacturing activities, Renin also sources certain products and raw materials from China, Brazil, and certain other countries.

Other

In addition to its principal holdings, the Company has investments in other operating businesses, including a restaurant located in South Florida that was acquired in 2018 through a loan foreclosure, and an entity which provides risk management advisory services to the Company and its affiliates and previously acted as an insurance agent. Through January 2024, the Company's affiliates included Bluegreen Vacations Holdings Corporation ("BVH"), and the entity provided risk management advisory services to BVH. However, in January 2024, BVH was acquired by Hilton Grand Vacations Inc. ("HGV"), and although the Company's risk management entity temporarily provided transition services related to risk management to BVH and HGV following the acquisition in January 2024, the Company is no longer providing such risk management advisory services to BVH or HGV. The fees earned by the entity for services provided to the Company are eliminated in consolidation.

Table of Contents

Basis of Financial Statement Presentation

The condensed consolidated financial statements of the Company include the consolidated financial statements of BBX Capital and its wholly-owned subsidiaries, other entities in which BBX Capital or its wholly-owned subsidiaries hold controlling financial interests, and any VIEs in which BBX Capital or one of its consolidated subsidiaries is deemed the primary beneficiary of the VIE. Inter-company accounts and transactions have been eliminated in consolidation.

In November 2018, BBX Capital Real Estate acquired a 50% equity interest in the Altman Companies, and Mr. Joel Altman continued to own the remaining 50% equity interest. On January 31, 2023 (the “Acquisition Date”), BBXRE acquired the remaining 50% equity interests in the Altman Companies, and the Altman Companies became a wholly-owned subsidiary of the Company. Prior to the Acquisition Date, the Company accounted for its investment in the Altman Companies under the equity method of accounting. However, as of and subsequent to the Acquisition Date, the Company has consolidated the Altman Companies in its consolidated financial statements. As a result, the Company's statement of operations and comprehensive (loss) income, statement of changes in equity, and statement of cash flows for the three and six months ended June 30, 2023 reflect the activities of the Altman Companies under the equity method of accounting for the one month ended January 31, 2023 and include the activities of the Altman Companies and its subsidiaries on a consolidated basis from February 1, 2023 to June 30, 2023.

In the Company’s opinion, the financial information furnished herein reflects all adjustments consisting of normal recurring items necessary for a fair presentation of its financial position, results of operations, and cash flows for the interim periods reported in this Quarterly Report on Form 10-Q. The condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, these financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. Also, these unaudited condensed consolidated financial statements and related notes are presented as permitted by Form 10-Q and should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”) filed with the SEC on March 15, 2024.

Use of Estimates

The preparation of financial statements prepared in conformity with GAAP require the Company to make estimates and assumptions, including assumptions about current and future economic and market conditions which affect reported amounts and related disclosures in the Company’s financial statements, and actual results could differ materially from those estimates.

Due to, among other things, the impact of the inflationary and geopolitical environment, including the impact of interest rates, decreased consumer demand, labor shortages, supply chain issues, and economic uncertainty, actual conditions could materially differ from the Company’s expectations and estimates, which would materially affect the Company’s results of operations and financial condition. The severity, magnitude, and duration, as well as the economic consequences of these conditions are uncertain, rapidly changing, and difficult to predict. As a result, the Company’s accounting estimates and assumptions may change over time in response to changes in, and the impact of, such external factors. Such changes could result in, among other adjustments, future impairments of intangible assets, long-lived assets, and investments in unconsolidated subsidiaries and additional future reserves for inventory and receivables.

Impact of Current Economic Issues

The Company and the industries in which it operates have been impacted by economic trends in the U.S. and global economies, including (i) decreased consumer demand, (ii) disruptions in global supply chains, (iii) a general labor shortage and increases in wages, (iv) increased economic uncertainty, (v) inflationary pressures and higher costs to operate the Company’s businesses, including higher insurance costs, and (vi) higher interest rates. In light of the uncertain duration and impact of current economic trends, the Company has maintained significant liquidity. As of June 30, 2024, the Company’s consolidated cash and cash equivalent balances were $116.0 million, and its securities available for sale, which are primarily comprised of U.S. Treasury and federal agency securities with maturities of less than one year, were $10.8 million.

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Inflationary and economic trends have and may continue to adversely impact the Company's results of operations. The Federal Reserve has sought to address inflation through monetary policy, including the wind-down of quantitative easing and by increasing the Federal Funds rate. The Russian invasion of Ukraine and the related embargoes against Russia as well as piracy in shipping lanes have resulted in supply chain issues, with the conflict in the Middle East further exacerbating inflationary trends and supply chain disruptions. We believe the 525 basis point increase in the federal funds rate since March 2022 and the wind-down of quantitative easing during 2023 created economic uncertainty which negatively affected our operating results by, among other things: (i) increasing interest expense on variable rate debt and any new debt, (ii) decreasing gross margins due to increased costs of manufactured or purchased inventory and shipping, (iii) reducing the availability of debt and equity capital for new real estate investments and the number of real estate development projects meeting the Company’s investment criteria, (iv) increasing overall operating expenses due to increases in labor and service costs, (v) decreasing customer demand for our products, (vi) shifting customer behavior as consumers experience higher borrowing costs, including mortgage borrowings, and (vii) increasing the risk of impairments as a result of declining valuations. Recent anticipated decreases in interest rates have to date not resulted in long term changes and market volatility and the potential impact of the November elections has created uncertainty regarding future consumer sentiment.

While we have taken steps to increase the prices of our products, we do not believe that future increases will be accepted by our consumers, and any such increases could negatively impact customer retention and our gross margin. There is no assurance that the Company’s operating subsidiaries will be able to increase prices in response to increasing costs or maintain current price levels which could have a material adverse effect on the Company's results of operations and financial condition.

BBXRE's real estate assets are primarily located in Florida, and economic conditions in the Florida real estate market c