Exhibit 99.2

 

UNAUDITEd Pro Forma consolidated Financial Information for BBX Capital, Inc.



The unaudited pro forma consolidated financial statements set forth below have been derived from BBX Capital, Inc.’s historical annual and interim financial statements, including its unaudited statement of financial condition as of September 30, 2020 and its unaudited statement of operations and comprehensive income for the nine months ended September 30, 2020, which are included in the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2020 filed with the SEC, and its audited statement of operations for the year ended December 31, 2019, which is included in the Company’s Information Statement, dated August 27, 2020, attached as Exhibit 99.1 to the Company’s Registration Statement on Form 10 filed with the SEC on August 27, 2020 (the “Form 10 Information Statement”).



The unaudited pro forma consolidated statements of operations and comprehensive income for the nine months ended September 30, 2020 and the year ended December 31, 2019 give effect to Renin’s acquisition of Colonial Elegance as if the transaction occurred on January 1, 2019. The unaudited pro forma statement of financial condition as of September 30, 2020 gives effect to Renin’s acquisition of Colonial Elegance as if the transaction occurred on September 30, 2020.    



The Transaction Accounting Adjustments columns in the accompanying unaudited pro forma consolidated financial statements include adjustments necessary to account for the Acquisition, including i) the recognition of the assets acquired and liabilities assumed associated with Colonial Elegance at fair value and ii) the elimination of amounts related to assets and liabilities associated with Colonial Elegance that are included in the “Colonial Elegance Inc. Historical” column but were not included in the Acquisition. The Company contributed $5.0 million to Renin to partially fund the Acquisition, while the remainder of the Acquisition was funded by Renin using borrowings under its 2020 TD Bank Credit Facility. The “Other Transaction Accounting Adjustments” columns in the accompanying unaudited pro forma consolidated financial statements include adjustments related to the additional borrowings under the 2020 TD Bank Credit Facility.

 

In management’s opinion, the unaudited pro forma consolidated financial statements reflect adjustments necessary to present fairly the Company’s pro forma results and financial position as of and for the periods indicated. The Transaction Accounting Adjustments and Other Transaction Accounting Adjustments reflected in the unaudited pro forma consolidated financial statements are based on currently available information and assumptions management believes are, under the circumstances and given the information available at this time, reasonable and directly attributable to the Acquisition and related transactions. In addition, as described in further detail below, the estimated fair values of the assets acquired and liabilities assumed associated with Colonial Elegance are preliminary and subject to change, as management is in the process of completing its valuation analysis and its accounting for the Acquisition is not complete as of the date of this report. The purchase consideration is also subject to change based on post-closing adjustments, if any, for working capital.



The unaudited pro forma consolidated financial statements are for illustrative and informational purposes only and are not intended to represent what the Company’s results of operations or financial position would have been had the Acquisition and related transactions occurred on the dates assumed. The unaudited pro forma consolidated financial statements also should not be considered indicative of the Company’s future results of operations or financial position following the Acquisition.



The unaudited pro forma consolidated financial statements have been derived from and should be read in conjunction with the Company’s historical financial statements included in the Company’s Form 10 Information Statement and Quarterly Report on Form 10-Q for the nine months ended September 30, 2020 and Colonial Elegance’s audited financial statements filed as Exhibit 99.1 to this Form 8-K/A.  The amounts included in the “Colonial Elegance Inc. Historical columns in the pro forma consolidated financial statements reflect the historical financial statements of Colonial Elegance for the applicable periods presented as derived from the historical accounting records of Colonial Elegance and do not agree to the Colonial Elegance’s financial statements filed as Exhibit 99.1 to this Form 8-K/A due to the requirement to conform the financial information to BBX Capital, Inc.’s financial statement periods. 


 

BBX Capital, Inc.

Unaudited Pro Forma Consolidated Statement of Financial Condition

As of September 30, 2020

(In thousands, except share data)







 

 

 

 

 

 

 

 

 

 



 

 

Colonial

 

Transaction

 

Other Transaction

 

 



BBX Capital, Inc.

 

Elegance Inc.

 

Accounting

 

Accounting

 

 



Historical

 

Historical

 

Adjustments

 

Adjustments

 

Pro Forma

ASSETS

$

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

96,592 

 

 —

 

(43,225)

(2)

38,225 

(4)

91,592 

Restricted cash

 

250 

 

 —

 

 —

 

 —

 

250 

Trade accounts receivable, net

 

15,337 

 

7,676 

(2)

 —

 

 —

 

23,013 

Trade inventory

 

16,351 

 

11,736 

(2)

620 

(2)

 —

 

28,707 

Real estate

 

59,495 

 

 —

 

 —

 

 —

 

59,495 

Investments in and advances to unconsolidated real estate joint ventures

 

60,648 

 

 —

 

 —

 

 —

 

60,648 

Investment in and advances to IT'SUGAR, LLC

 

18,942 

 

 —

 

 —

 

 —

 

18,942 

Note receivable from Bluegreen Vacations Holding Corporation

 

75,000 

 

 —

 

 —

 

 —

 

75,000 

Property and equipment, net

 

6,122 

 

569 

(2)

 —

 

 —

 

6,691 

Goodwill

 

 —

 

3,648 

(2)

4,304 

(2)

 

 

7,952 

Intangible assets, net

 

3,045 

 

6,980 

(2)

14,448 

(2)

 —

 

24,473 

Operating lease assets

 

11,889 

 

2,389 

(2)

 —

 

 —

 

14,278 

Deferred tax asset, net

 

8,696 

 

 —

 

(164)

(2)

117 

(1)

8,649 

Other assets

 

15,080 

 

432 

(2)

 —

 

216 

(4)

15,728 

Total assets

 

387,447 

 

33,430 

 

(24,017)

 

38,558 

 

435,418 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

5,848 

 

6,009 

(2)

 —

 

 —

 

11,857 

Accrued expenses

 

13,384 

 

1,015 

(2)

 —

 

440 

(1)

14,839 

Other liabilities (incl. taxes payable)

 

6,097 

 

605 

 

(605)

(3)

 —

 

6,097 

Operating lease liabilities

 

12,199 

 

2,389 

(2)

 —

 

 —

 

14,588 

Deferred tax liability, net

 

 

 

1,540 

 

(1,540)

(3)

 —

 

 —

Notes payable and other borrowings

 

36,000 

 

15,079 

 

(15,079)

(3)

38,441 

(4)

74,441 

Total liabilities

 

73,528 

 

26,637 

 

(17,224)

 

38,881 

 

121,822 

Equity:

 

 

 

 

 

 

 

 

 

 

Colonial Equity

 

 —

 

6,793 

 

(6,793)

 

 —

 

Preferred stock of $.01 par value; authorized 10,000,000 shares

 

 —

 

 —

 

 —

 

 —

 

 —

Class A Common Stock of $.01 par value; authorized 30,000,000 shares; issued and outstanding 15,624,091

 

156 

 

 

 

 —

 

 —

 

156 

Class B Common Stock of $.01 par value; authorized 4,000,000 shares; issued and outstanding 3,639,596

 

37 

 

 —

 

 —

 

 —

 

37 

Additional paid-in capital

 

312,153 

 

 —

 

 —

 

(323)

(1)

311,830 

Accumulated earnings

 

 —

 

 —

 

 —

 

 —

 

 —

Accumulated other comprehensive income

 

1,375 

 

 —

 

 —

 

 —

 

1,375 

Total shareholders' equity

 

313,721 

 

6,793 

 

(6,793)

 

(323)

 

313,398 

Noncontrolling interests

 

198 

 

 —

 

 —

 

 —

 

198 

Total equity

 

313,919 

 

6,793 

 

(6,793)

 

(323)

 

313,596 

Total liabilities and equity

$

387,447 

 

33,430 

 

(24,017)

 

38,558 

 

435,418 



 

 

 

 

 

 

 

 

 

 



See Notes to Unaudited Pro Forma Statement of Financial Condition

2

 


 

Notes to Unaudited Pro Forma Statement of Financial Condition



1.

Accrued expenses includes $440,000 of estimated transaction costs incurred by Renin in connection with the Acquisition, which resulted in an increase in deferred tax assets of $117,000.



2.

The following table summarizes the i) historical cost and estimated fair values of Colonial Elegance’s identifiable net assets acquired, including intangible assets, ii) goodwill acquired, iii) purchase consideration, and iv) related pro forma Transaction Accounting Adjustments.  







 

 

 

 

 

 



 

Colonial Elegance Inc.

 

Estimated

 

 



 

Historical Cost of

 

Fair Value of

 

Transaction

(in thousands)

 

Net Assets Acquired

 

Net Assets Acquired

 

Adjustments

Cash

$

 -

$

 -

$

 -

Accounts receivable

 

7,676 

 

7,676 

 

 -

Trade inventory

 

11,736 

 

12,356 

 

620 

Property and equipment

 

569 

 

569 

 

 -

Operating lease assets

 

2,389 

 

2,389 

 

 -

Deferred tax asset

 

 -

 

(164)

 

(164)

Other assets

 

432 

 

432 

 

 -

Accounts payable

 

(6,009)

 

(6,009)

 

 -

Accrued expenses

 

(1,015)

 

(1,015)

 

 -

Operating lease liabilities

 

(2,389)

 

(2,389)

 

 -

Intangible assets, net

 

6,980 

 

21,428 

 

14,448 

Total identifiable net assets

$

20,369 

 

35,273 

 

 



 

 

 

 

 

 

Goodwill

 

3,648 

 

7,952 

$

4,304 

Total purchase consideration

 

 

$

43,225 

 

 



The purchase consideration of $43.2 million was calculated by applying the exchange rate between the U.S. dollar and Canadian dollar on September 30, 2020 to the base purchase price of CAD $51.0 million and the excess working capital adjustment of CAD $6.7 million that was estimated at closing on October 22, 2020. For the purposes of the pro forma statement of financial condition, the difference in the excess working capital adjustment of CAD $6.7 million that was estimated at closing and the adjustment that would have been calculated if the Acquisition had closed on September 30, 2020 is reflected in goodwill. In addition, the pro forma statement of financial condition assumes that the purchase consideration, including any related holdbacks, were paid out in full in cash at closing. The total purchase consideration and the actual payment of amounts held back by Renin at closing are subject to change based on i) post-closing adjustments, if any, to the excess working capital adjustment and ii) the actual exchange rates between the U.S. dollar and Canadian dollar on the acquisition date of October 22, 2020 .



The identifiable net assets acquired in the above table were calculated from Colonial Elegance’s historical financial statements as of September 30, 2020 and will change based on the actual net working capital acquired and the exchange rates between the U.S. dollar and Canadian dollar on the acquisition date of October 22, 2020.  Further, the estimated fair values of the assets acquired and liabilities assumed associated with Colonial Elegance are preliminary and subject to change, as management is in the process of completing its valuation analysis and its accounting for the Acquisition is not complete as of the date of this report. As a result, the amounts reported in the above table are provisional amounts that may be updated in subsequent periods to reflect the completion of management’s valuation analysis and any additional information obtained during the measurement period.



3.

In connection with the Acquisition, Renin did not assume Colonial Elegance’s historical borrowings or tax liabilities.



4.

The Company contributed $5.0 million to Renin to partially fund the Acquisition, while the remainder of the Acquisition was funded by Renin using borrowings under its 2020 TD Bank Credit Facility, including $30.0 million from the term loan and the remainder from the operating loan under the facility. Accordingly, the pro forma statement of financial condition assumes that the pro forma estimated purchase consideration of $43.2 million (derived as outlined in Note 2) was funded with $5.0 million of cash, $30.0 million of borrowings from the term loan in the 2020 TD Bank Credit Facility,  and approximately $8.2 million of borrowings from the operating loan in the 2020 TD Bank Credit Facility.  Included in the borrowings were $216,000 and $324,000 of debt issuance costs for the operating loan and term loan.

3

 


 

BBX Capital, Inc.

Unaudited Consolidated Statement of Operations and Comprehensive Income

For the Year Ended December 31, 2019



 

 

 

 

 

 

 

 

 

 



 

 

Colonial

 

Transaction

 

Other Transaction

 

 



BBX Capital, Inc.

 

Elegance Inc.

 

Accounting

 

Accounting

 

 



Historical

 

Historical

 

Adjustments

 

Adjustments

 

Pro Forma

Revenues:

 

 

 

 

 

 

 

 

 

 

Trade sales

$

180,319 

 

45,714 

 

 —

 

 —

 

226,033 

Sales of real estate inventory

 

5,049 

 

 —

 

 —

 

 —

 

5,049 

Interest income

 

811 

 

 —

 

 —

 

 —

 

811 

Net gains on sales of real estate assets

 

13,616 

 

 —

 

 —

 

 —

 

13,616 

Other revenue

 

3,929 

 

 —

 

 —

 

 —

 

3,929 

Total revenues

 

203,724 

 

45,714 

 

 —

 

 —

 

249,438 

Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

Cost of trade sales

 

125,735 

 

35,626 

 

620 

(1)

 —

 

161,981 

Cost of real estate inventory sold

 

2,643 

 

 —

 

 —

 

 —

 

2,643 

Interest expense

 

433 

 

1,114 

 

(1,114)

(2)

2,295 

(5)

2,728 

Recoveries from loan losses, net

 

(5,428)

 

 —

 

 —

 

 —

 

(5,428)

Impairment losses

 

189 

 

 —

 

 —

 

 —

 

189 

Selling, general and administrative expenses

 

89,655 

 

6,726 

 

(133)

(3)

 —

 

96,248 

Total costs and expenses

 

213,227 

 

43,466 

 

(627)

 

2,295 

 

258,361 

Operating losses

 

(9,503)

 

2,248 

 

627 

 

(2,295)

 

(8,923)

Equity in net earnings of unconsolidated real estate joint ventures

 

37,898 

 

 —

 

 —

 

 —

 

37,898 

Other income

 

665 

 

(2)

 

 —

 

 —

 

663 

Foreign exchange loss

 

(75)

 

(230)

 

 —

 

 —

 

(305)

Income (loss) from continuing operations before income taxes

 

28,985 

 

2,016 

 

627 

 

(2,295)

 

29,333 

(Provision) benefit for income taxes

 

(8,334)

 

(558)

 

(169)

(4)

728 

(4)

(8,333)

Net income (loss) from continuing operations

 

20,651 

 

1,458 

 

458 

 

(1,567)

 

21,000 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

(9,434)

 

 —

 

 —

 

 —

 

(9,434)

Benefit for income taxes

 

2,296 

 

 —

 

 —

 

 —

 

2,296 

Loss from discontinued operations

 

(7,138)

 

 —

 

 —

 

 —

 

(7,138)

Net income (loss)

 

13,513 

 

1,458 

 

458 

 

(1,567)

 

13,862 

Less: Net loss attributable to noncontrolling interests

 

224 

 

 —

 

 —

 

 —

 

224 

Net income (loss) attributable to shareholders

$

13,737 

 

1,458 

 

458 

 

(1,567)

 

14,086 



 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share from continuing operations

 

1.08 

 

 

 

 

 

 

 

1.10 

Basic and diluted loss per share from discontinued operations

 

(0.37)

 

 

 

 

 

 

 

(0.37)

Total basic and diluted earnings per share

 

0.71 

 

 

 

 

 

 

 

0.73 

Weighted average number of common shares outstanding

 

19,318 

 

 

 

 

 

 

 

19,318 

Net income (loss)

 

13,513 

 

1,458 

 

458 

 

(1,567)

 

13,862 

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

 

 

 —

Unrealized gain on securities available for sale

 

51 

 

 —

 

 —

 

 —

 

51 

Foreign currency translation adjustments

 

287 

 

 —

 

 —

 

 —

 

287 

Other comprehensive income, net

$

338 

 

 —

 

 —

 

 —

 

338 

Comprehensive income (loss), net of tax

 

13,851 

 

1,458 

 

458 

 

(1,567)

 

14,200 

Less: Comprehensive loss attributable to noncontrolling interests

 

224 

 

 —

 

 —

 

 —

 

224 

Comprehensive income (loss) attributable to shareholders

 

14,075 

 

1,458 

 

458 

 

(1,567)

 

14,424 



 

 

 

 

 

 

 

 

 

 



See Notes to Unaudited Pro Forma Statements of Operations and Comprehensive Income



4

 


 

BBX Capital, Inc.

Unaudited Consolidated Statement of Operations and Comprehensive Income

For the Nine Months Ended September 30, 2020







 

 

 

 

 

 

 

 

 

 

 

 



 

 

Colonial

 

Transaction

 

 

Other Transaction

 

 

 



BBX Capital, Inc.

 

Elegance Inc.

 

Accounting

 

 

Accounting

 

 

 



Historical

 

Historical

 

Adjustments

 

 

Adjustments

 

 

Pro Forma

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Trade sales

$

99,628 

 

40,936 

 

 —

 

 

 —

 

 

140,564 

Sales of real estate inventory

 

14,248 

 

 —

 

 —

 

 

 —

 

 

14,248 

Interest income

 

586 

 

 —

 

 —

 

 

 —

 

 

586 

Net gains on sales of real estate assets

 

130 

 

 —

 

 —

 

 

 —

 

 

130 

Other revenue

 

2,398 

 

 —

 

 —

 

 

 —

 

 

2,398 

Total revenues

 

116,990 

 

40,936 

 

 —

 

 

 —

 

 

157,926 

Costs and Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of trade sales

 

80,154 

 

31,973 

 

 —

 

 

 —

 

 

112,127 

Cost of real estate inventory sold

 

9,473 

 

 —

 

 —

 

 

 —

 

 

9,473 

Interest expense

 

 —

 

589 

 

(589)

(2)

 

1,304 

(5)

 

1,304 

Recoveries from loan losses, net

 

(5,844)

 

 —

 

 —

 

 

 —

 

 

(5,844)

Impairment losses

 

30,740 

 

 —

 

 —

 

 

 —

 

 

30,740 

Selling, general and administrative expenses

 

54,024 

 

5,068 

 

(73)

(3)

 

 —

 

 

59,019 

Total costs and expenses

 

168,547 

 

37,630 

 

(662)

 

 

1,304 

 

 

206,819 

Operating losses

 

(51,557)

 

3,306 

 

662 

 

 

(1,304)

 

 

(48,893)

Equity in net earnings of unconsolidated real estate joint ventures

 

50 

 

 —

 

 —

 

 

 —

 

 

50 

Loss on the deconsolidation of IT'SUGAR, LLC

 

(3,326)

 

 —

 

 —

 

 

 —

 

 

(3,326)

Other income

 

192 

 

 —

 

 —

 

 

 —

 

 

192 

Foreign exchange (loss) gain

 

214 

 

73 

 

 —

 

 

 —

 

 

287 

(Loss) income from continuing operations before income taxes

 

(54,427)

 

3,379 

 

662 

 

 

(1,304)

 

 

(51,690)

Benefit (provision) for income taxes

 

10,847 

 

(876)

 

(175)

(4)

 

346 

(4)

 

10,142 

Net (Loss) income from continuing operations

 

(43,580)

 

2,503 

 

487 

 

 

(958)

 

 

(41,548)

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

(91)

 

 —

 

 —

 

 

 —

 

 

(91)

Benefit for income taxes

 

17 

 

 —

 

 —

 

 

 —

 

 

17 

Loss from discontinued operations

 

(74)

 

 —

 

 —

 

 

 —

 

 

(74)

Net (loss) income

 

(43,654)

 

2,503 

 

487 

 

 

(958)

 

 

(41,622)

Less: Net loss attributable to noncontrolling interests

 

4,822 

 

 —

 

 —

 

 

 

 

 

4,822 

Net (loss) income attributable to shareholders

$

(38,832)

 

2,503 

 

487 

 

 

(958)

 

 

(36,800)



 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share from continuing operations

 

(2.01)

 

 

 

 

 

 

 

 

 

(1.90)

Basic and diluted loss per share from discontinued operations

 

 —

 

 

 

 

 

 

 

 

 

 —

Total basic and diluted loss per share

 

(2.01)

 

 

 

 

 

 

 

 

 

(1.90)

Weighted average number of common shares outstanding

 

19,318 

 

 

 

 

 

 

 

 

 

19,318 

Net (loss) income

 

(43,654)

 

2,503 

 

487 

 

 

(958)

 

 

(41,622)

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on securities available for sale

 

19 

 

 —

 

 —

 

 

 —

 

 

19 

Foreign currency translation adjustments

 

(198)

 

 —

 

 —

 

 

 —

 

 

(198)

Other comprehensive loss, net

$

(179)

 

 —

 

 —

 

 

 —

 

 

(179)

Comprehensive (loss) income, net of tax

 

(43,833)

 

2,503 

 

487 

 

 

(958)

 

 

(41,801)

Less: Comprehensive loss attributable to noncontrolling interests

 

4,822 

 

 —

 

 —

 

 

 —

 

 

4,822 

Comprehensive (loss) income attributable to shareholders

 

(39,011)

 

2,503 

 

487 

 

 

(958)

 

 

(36,979)



 

 

 

 

 

 

 

 

 

 

 

 



See Notes to Unaudited Pro Forma Statements of Operations and Comprehensive Income

5

 


 

Notes to Unaudited Pro Forma Statements of Operations and Comprehensive Income



1.

Amount represents the recognition of the fair value adjustment to inventory at the acquisition date as a cost of trade sales.



2.

Amounts represent interest expense on Colonial Elegance’s borrowings that were not assumed in the acquisition.



3.

Amounts represent the difference in i) the historical amortization expense recognized by Colonial Elegance related to its identifiable intangible assets and ii) the estimated amortization expense expected to be recognized by Renin based on the estimated fair values of the identifiable intangible assets associated with Colonial Elegance as of the acquisition date. As described above, the estimated fair values of the assets acquired and liabilities assumed associated with Colonial Elegance are preliminary and subject to change, as management is in the process of completing its valuation analysis and its accounting for the Acquisition is not complete as of the date of this report.



4.

The benefit (provision) for income tax was calculated based on a statutory income tax rate of 26.5%.



5.

Amounts represent interest expense on borrowings to fund the acquisition assuming that the transaction was completed on January 1, 2019.  Amounts outstanding under the Term Loan and Operating Loan bear interest at (i) the Canadian Prime Rate plus a spread between 1.375% to 1.875% per annum, (ii) the United States Base Rate plus a spread between 1.00% to 1.50% per annum, or (iii) LIBOR or Canadian Bankers Acceptance Rate, in each case plus a spread between 2.875% to 3.375% per annum, with the spreads applicable to each rate depending on the Renin’s total leverage. The principal on the $30.0 million term loan is payable quarterly, with $563,000 payable quarterly in Year 1 and $750,000 payable quarterly in Year 2.The pro forma interest expense was calculated based on the 3 month LIBOR rate at the applicable date plus a spread of 3.375% adjusting quarterly. Further, the calculation of pro forma interest expense assumes that Renin paid the required principal payments under the term loan pursuant to the stated amortization schedule but did not make any principal payments for amounts that were assumed to be drawn under the operating loan in connection with the Acquisition.