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BBX Capital Corporation Reports Financial Results

For the Third Quarter 2019

FORT LAUDERDALE, Florida – November 1, 2019BBX Capital Corporation (NYSE: BBX, OTCQX: BBXTB) (“BBX Capital” or the “Company”) reported today its financial results for the quarter ended September 30, 2019.



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



Third Quarter 2019 Compared to Third Quarter 2018:

·

Total consolidated revenues of $255.1 million vs. $254.4 million    

·

Net income attributable to shareholders of $22.4 million vs. $6.2 million  

·

Diluted earnings per share of $0.24 vs. $0.06 

·

Free cash flow of $50.1 million vs. $17.7 million (1)

·

Adjusted EBITDA of $52.1 million vs. $22.1 million (2)

(1)

See the supplemental tables included in this release for a reconciliation of BBX Capital’s cash flow from operating activities to free cash flow, which is defined as cash provided by operating activities less capital expenditures for property and equipment.

(2)

See the supplemental tables included in this release for a reconciliation of BBX Capital’s net income to Adjusted EBITDA.



Balance Sheet as of September 30, 2019 Compared to December 31, 2018

·

Total consolidated assets of $1.8 billion vs. $1.7 billion

·

Total shareholders' equity of $556.7 million vs. $549.6 million

·

Fully diluted book value per share of $5.77 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 outstanding plus unvested restricted stock awards as of period end



During the quarter ended September 30, 2019, the Company repurchased approximately 1.4 million shares of its Class A Common Stock for $7.0 million pursuant to the share repurchase program approved by the Company’s Board of Directors in June 2017. As of September 30, 2019, the Company had repurchased approximately 3.3 million shares of its Class A Common Stock for $18.9 million under the June 2017 repurchase program.



Alan B. Levan, Chairman and Chief Executive Officer of BBX Capital Corporation, commented, “The third quarter of 2019 reflects our ongoing objectives to increase intrinsic value for our shareholders, to position our segments for long-term growth, and to streamline our business verticals. During the quarter, we realized our investment in our Altis at Bonterra joint venture, which resulted in earnings of $29.1 million and cash proceeds of $46.0 million. In addition, Bluegreen remained focused on its ongoing growth initiatives, including the addition of vacation package sales kiosks in seven Cabela’s locations and the addition of inventory and sales office space at the Fountains Resort in Orlando, Florida. Further, as part of our ongoing efforts to streamline our business verticals, we exited our operations as a franchisee of MOD Pizza restaurants in Florida.”.



“As we have stated each quarter, since many of BBX Capital’s 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,” Levan concluded.



1

 

 


 

---------------



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, 2018 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 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.



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.



***



The following selected information relates to the operating activities of Bluegreen Vacations,  BBX Capital Real Estate,  Renin, and IT’SUGAR. 



Bluegreen Vacations -  Selected Financial Data 



Selected highlights of Bluegreen Vacations’ financial results include:



Third Quarter 2019 Compared to Third Quarter 2018:

·

Sales of Vacation Ownership Interests (“VOIs”) of $66.3 million vs. $70.7 million

·

System-wide sales of VOIs of $170.4 million vs. $173.3 million (1)

·

Other fee-based services revenue of  $33.7 million vs. $31.1 million

·

Income before income taxes of $30.4 million vs. $32.5 million

·

Adjusted EBITDA of $37.0 million vs. $34.9 million (2)

·

Free cash flow of $34.7 million vs. $13.3 million  (3)

(1)

See the supplemental tables included in this release  for a reconciliation of Bluegreen’s Sales of VOIs to System-wide sales of VOIs.

(2)

See the supplemental tables included in this release  for a reconciliation of Bluegreen’s net income to Adjusted EBITDA.

(3)

See the supplemental tables included in this release for a reconciliation of Bluegreen’s cash flow from operating activities to free cash flow.



In addition to BBX Capital’s Annual Report on Form 10-K for the year ended December 31, 2018,  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, 2018 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, which are available to view on the SEC's website, https://www.sec.gov, and on Bluegreen Vacations website, www.BluegreenVacations.com.     



BBX Capital Real Estate -  Selected Financial Data



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



Third Quarter 2019 Compared to Third Quarter 2018:

·

Revenues of $1.1 million vs.  $8.3 million

·

Equity in net earnings of unconsolidated real estate joint ventures of $28.5 million vs.  $0.4 million

·

Income before income taxes of $29.1 million vs. $1.9 million



2

 


 

BBXRE’s results for the quarter ended September 30, 2019 as compared to the same 2018 period reflect  an increase in equity in earnings of unconsolidated joint ventures primarily due to the Altis at Bonterra joint venture’s sale of its 314 unit multifamily apartment community located in Hialeah, Florida. As a result of the sale, BBXRE recognized $29.1 million of equity earnings and received approximately $46.0 million of distributions from the joint venture during the third quarter of 2019.



Renin - Selected Financial Data



Selected highlights of Renin’s financial results include:



Third Quarter 2019 Compared to Third Quarter 2018:

·

Trade sales of $16.4 million vs. $15.3 million

·

Gross margin of $3.5 million vs. $3.0 million

·

Gross margin percentage of 21.04% vs. 19.73%

·

Income before income taxes of $479,000 vs. $693,000

·

Adjusted EBITDA of $0.9 million vs $1.3 million (1) 

(1)

See the supplemental tables included in this release for a reconciliation of Renin’s net income to Adjusted EBITDA.



Renin’s operating results for the quarter ended September 30, 2019 as compared to the same 2018 period reflect an increase in trade sales due to higher sales volume from Renin’s retail channel customers and an improvement in Renin’s gross margin percentage, which reflects lower cost of manufactured products and a barn door product promotion in 2018 that was not repeated in 2019, partially offset by the impact of tariffs on products imported from China. These improvements were offset by an increase in selling, general and administrative expenses primarily due to consulting expenses and higher employee compensation expenses associated with performance bonuses. 



IT’SUGAR- Selected Financial Data



Selected highlights of IT’SUGAR’s financial results include:



Third Quarter 2019 Compared to Third Quarter 2018:

·

Trade sales of $24.7 million vs. $22.7 million

·

Gross margin of $10.8 million vs. $10.4 million

·

Gross margin percentage of 43.67% vs. 46.01%

·

Income before income taxes of $1.2 million vs. $1.6 million

·

Adjusted EBITDA of $2.4 million vs $2.7 million (1)

(1)

See the supplemental tables included in this release for a reconciliation of IT’SUGAR’s net income to Adjusted EBITDA.



IT'SUGAR's operating results for the quarter ended September 30, 2019 as compared to the same 2018 period reflect a net increase in trade sales and gross margin primarily due to the opening of new locations during the fourth quarter of 2018 and the first nine months of 2019, including the FAO Schweetz location in New York City and the Grand Bazaar location in Las Vegas. These increases were offset by a net increase in selling, general, and administrative expenses primarily due to expenses associated with IT’SUGAR’s new locations,  executive severance expense, and costs related to the closure of certain store locations.



IT’SUGAR anticipates opening a 21,000 square foot, three-story flagship location at American Dream, a three million square foot shopping and entertainment complex in New Jersey, during the fourth quarter of 2019.  

3

 


 

Other Investments



The Company also has other investments in various operating businesses that generated aggregate losses before income taxes of $6.3 million and $2.7 million during the three months ended September 30, 2019 and 2018,  respectively.  The aggregate losses for the three months ended September 30, 2019 includes $4.0 million of impairment losses recognized in connection with the Company’s exit of its operations as a franchisee of MOD Pizza restaurant locations in Florida, as the Company terminated its area development and franchise agreements with MOD Pizza, transferred seven of its restaurant locations to MOD Pizza, and closed its remaining two locations during the third quarter of 2019.



---



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, Renin, and IT’SUGAR.   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 (VOIs) and manages resorts in popular leisure and urban destinations. The Bluegreen Vacation Club is a flexible, points-based vacation ownership plan with approximately 219,000 owners, 69 Club and Club Associate Resorts and access to nearly 11,400 other hotels and resorts through partnerships and exchange networks as of September 30, 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.



BBX Capital Corporation Contact Info:

Investor Relations: Leo Hinkley, Managing Director, Investor Relations Officer

954-940-5300,  Email: LHinkley@BBXCapital.com



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



###

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

4

 


 

generally to the industries in which the Company operates, including the resort development and vacation ownership industries in which Bluegreen operates, the development, operation, management and investment in residential and commercial real estate, the home improvement industry in which Renin operates, and the sugar and confectionery industry in which IT’SUGAR 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 legacy 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, Renin, IT’SUGAR, 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. 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, 2018 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 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.

###



5

 


 

The following supplemental table presents BBX Capital’s Consolidating Statement of Operations (unaudited) for the three months ended September  30, 2019 (in thousands):





 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

Bluegreen

 

BBX Capital Real Estate

 

Renin

 

IT'SUGAR

 

Other

 

Reconciling Items and Eliminations

 

Segment Total

Sales of VOIs

$

66,318 

 

 -

 

 -

 

 -

 

 -

 

 -

 

66,318 

Fee-based sales commissions

 

60,478 

 

 -

 

 -

 

 -

 

 -

 

 -

 

60,478 

Other fee-based services

 

33,744 

 

 -

 

 -

 

 -

 

 -

 

 -

 

33,744 

Cost reimbursements

 

21,111 

 

 -

 

 -

 

 -

 

 -

 

 -

 

21,111 

Trade sales

 

 -

 

 -

 

16,442 

 

24,678 

 

6,541 

 

(1)

 

47,660 

Sales of real estate inventory

 

 -

 

370 

 

 -

 

 -

 

 -

 

 -

 

370 

Interest income

 

22,081 

 

166 

 

 -

 

 -

 

45 

 

(495)

 

21,797 

Net gains on sales of real estate assets

 

 -

 

399 

 

 -

 

 -

 

 -

 

 -

 

399 

Other revenue

 

2,146 

 

197 

 

 -

 

15 

 

1,053 

 

(174)

 

3,237 

Total revenues

 

205,878 

 

1,132 

 

16,442 

 

24,693 

 

7,639 

 

(670)

 

255,114 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of VOIs sold

 

3,121 

 

 -

 

 -

 

 -

 

 -

 

 -

 

3,121 

Cost of other fee-based services

 

23,746 

 

 -

 

 -

 

 -

 

 -

 

 -

 

23,746 

Cost reimbursements

 

21,111 

 

 -

 

 -

 

 -

 

 -

 

 -

 

21,111 

Cost of trade sales

 

 -

 

 -

 

12,983 

 

13,902 

 

4,976 

 

(1)

 

31,860 

Cost of real estate inventory sold

 

 -

 

 -

 

 -

 

 -

 

 -

 

 -

 

 -

Interest expense

 

10,388 

 

 -

 

131 

 

24 

 

29 

 

1,298 

 

11,870 

Recoveries from loan losses, net

 

 -

 

(1,821)

 

 -

 

 -

 

 -

 

 -

 

(1,821)

Impairment losses

 

 -

 

37 

 

 -

 

 -

 

3,993 

 

 -

 

4,030 

Selling, general and administrative expenses

 

117,159 

 

2,336 

 

2,849 

 

9,567 

 

4,900 

 

11,738 

 

148,549 

Total costs and expenses

 

175,525 

 

552 

 

15,963 

 

23,493 

 

13,898 

 

13,035 

 

242,466 

Equity in net earnings of unconsolidated real estate joint ventures

 

 -

 

28,534 

 

 -

 

 -

 

 -

 

 -

 

28,534 

Foreign exchange gain (loss)

 

 -

 

 -

 

 -

 

 -

 

 -

 

 -

 

 -

Income (loss) before income taxes

$

30,353 

 

29,114 

 

479 

 

1,200 

 

(6,259)

 

(13,705)

 

41,182 



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The following supplemental table presents BBX Capital’s Consolidating Statement of Operations (unaudited) for the three months ended September  30, 2018 (in thousands):





 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Bluegreen

 

BBX Capital Real Estate

 

Renin

 

IT'SUGAR

 

Other

 

Reconciling Items and Eliminations

 

Segment Total

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of VOIs

$

70,698 

 

 -

 

 -

 

 -

 

 -

 

 -

 

70,698 

Fee-based sales commissions

 

61,641 

 

 -

 

 -

 

 -

 

 -

 

 -

 

61,641 

Other fee-based services

 

31,057 

 

 -

 

 -

 

 -

 

 -

 

 -

 

31,057 

Cost reimbursements

 

16,900 

 

 -

 

 -

 

 -

 

 -

 

 -

 

16,900 

Trade sales

 

 -

 

 -

 

15,330 

 

22,663 

 

5,815 

 

(5)

 

43,803 

Sales of real estate inventory

 

 -

 

7,478 

 

 -

 

 -

 

 -

 

 -

 

7,478 

Interest income

 

21,531 

 

229 

 

 -

 

 -

 

10 

 

(613)

 

21,157 

Other revenue

 

378 

 

572 

 

 -

 

99 

 

840 

 

(220)

 

1,669 

Total revenues

 

202,205 

 

8,279 

 

15,330 

 

22,762 

 

6,665 

 

(838)

 

254,403 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of VOIs sold

 

11,237 

 

 -

 

 -

 

 -

 

 -

 

 -

 

11,237 

Cost of other fee-based services

 

19,937 

 

 -

 

 -

 

 -

 

 -

 

 -

 

19,937 

Cost reimbursements

 

16,900 

 

 -

 

 -

 

 -

 

 -

 

 -

 

16,900 

Cost of trade sales

 

 -

 

 -

 

12,306 

 

12,236 

 

4,420 

 

(5)

 

28,957 

Cost of real estate inventory sold

 

 -

 

4,655 

 

 -

 

 -

 

 -

 

 -

 

4,655 

Interest expense

 

9,208 

 

 -

 

157 

 

 -

 

53 

 

1,712 

 

11,130 

Recoveries from loan losses, net

 

 -

 

(443)

 

 -

 

 -

 

 -

 

 -

 

(443)

Impairment losses

 

 -

 

193 

 

 -

 

 -

 

 -

 

 -

 

193 

Selling, general and administrative expenses

 

112,407 

 

2,307 

 

2,250 

 

8,962 

 

4,868 

 

12,765 

 

143,559 

Total costs and expenses

 

169,689 

 

6,712 

 

14,713 

 

21,198 

 

9,341 

 

14,472 

 

236,125 

Equity in net earnings of unconsolidated real estate joint ventures

 

 -

 

373 

 

 -

 

 -

 

 -

 

 -

 

373 

Foreign exchange gain

 

 -

 

 -

 

76 

 

 -

 

 -

 

 -

 

76 

Income (loss) before income taxes

$

32,516 

 

1,940 

 

693 

 

1,564 

 

(2,676)

 

(15,310)

 

18,727 









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The following supplemental table presents BBX Capital’s Consolidating Statement of Operations (unaudited) for the nine months ended September 30, 2019 (in thousands):





 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Bluegreen

 

BBX Capital Real Estate

 

Renin

 

IT'SUGAR

 

Other

 

Reconciling Items and Eliminations

 

Segment Total

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of VOIs

$

186,351 

 

 -

 

 -

 

 -

 

 -

 

 -

 

186,351 

Fee-based sales commissions

 

161,033 

 

 -

 

 -

 

 -

 

 -

 

 -

 

161,033 

Other fee-based services

 

94,015 

 

 -

 

 -

 

 -

 

 -

 

 -

 

94,015 

Cost reimbursements

 

58,705 

 

 -

 

 -

 

 -

 

 -

 

 -

 

58,705 

Trade sales

 

 -

 

 -

 

51,124 

 

63,347 

 

24,250 

 

(16)

 

138,705 

Sales of real estate inventory

 

 -

 

5,030 

 

 -

 

 -

 

 -

 

 -

 

5,030 

Interest income

 

65,964 

 

631 

 

 -

 

 -

 

130 

 

(1,995)

 

64,730 

Net gains on sales of real estate assets

 

 -

 

11,395 

 

 -

 

 -

 

 -

 

 -

 

11,395 

Other revenue

 

4,228 

 

1,492 

 

152 

 

241 

 

2,020 

 

(593)

 

7,540 

Total revenues

 

570,296 

 

18,548 

 

51,276 

 

63,588 

 

26,400 

 

(2,604)

 

727,504 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of VOIs sold

 

17,541 

 

 -

 

 -

 

 -

 

 -

 

 -

 

17,541 

Cost of other fee-based services

 

66,538 

 

 -

 

 -

 

 -

 

 -

 

 -

 

66,538 

Cost reimbursements

 

58,705 

 

 -

 

 -

 

 -

 

 -

 

 -

 

58,705 

Cost of trade sales

 

 -

 

 -

 

40,989 

 

37,442 

 

16,563 

 

(16)

 

94,978 

Cost of real estate inventory sold

 

 -

 

2,643 

 

 -

 

 -

 

 -

 

 -

 

2,643 

Interest expense

 

29,955 

 

 -

 

387 

 

81 

 

72 

 

4,184 

 

34,679 

Recoveries from loan losses, net

 

 -

 

(4,206)

 

 -

 

 -

 

 -

 

 -

 

(4,206)

Impairment losses

 

 -

 

37 

 

 -

 

 -

 

6,749 

 

 -

 

6,786 

Selling, general and administrative expenses

 

355,041 

 

6,709 

 

8,326 

 

26,645 

 

16,061 

 

35,728 

 

448,510 

Total costs and expenses

 

527,780 

 

5,183 

 

49,702 

 

64,168 

 

39,445 

 

39,896 

 

726,174 

Equity in net earnings of unconsolidated real estate joint ventures

 

 -

 

37,276 

 

 -

 

 -

 

 -

 

 -

 

37,276 

Foreign exchange loss

 

 -

 

 -

 

(24)

 

 -

 

 -

 

 -

 

(24)

Income (loss) before income taxes

$

42,516 

 

50,641 

 

1,550 

 

(580)

 

(13,045)

 

(42,500)

 

38,582 



8

 


 

The following supplemental table presents BBX Capital’s Consolidating Statement of Operations (unaudited) for the nine months ended September 30, 2018 (in thousands):





 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Bluegreen

 

BBX Capital Real Estate

 

Renin

 

IT'SUGAR

 

Other

 

Reconciling Items and Eliminations

 

Segment Total

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales of VOIs

$

195,412 

 

 -

 

 -

 

 -

 

 -

 

 -

 

195,412 

Fee-based sales commissions

 

167,581 

 

 -

 

 -

 

 -

 

 -

 

 -

 

167,581 

Other fee-based services

 

89,472 

 

 -

 

 -

 

 -

 

 -

 

 -

 

89,472 

Cost reimbursements

 

47,157 

 

 -

 

 -

 

 -

 

 -

 

 -

 

47,157 

Trade sales

 

 -

 

 -

 

47,205 

 

58,967 

 

19,954 

 

(12)

 

126,114 

Sales of real estate inventory

 

 -

 

17,138 

 

 -

 

 -

 

 -

 

 -

 

17,138 

Interest income

 

63,771 

 

2,064 

 

 -

 

 

105 

 

(2,203)

 

63,738 

Net gains on sales of real estate assets

 

 -

 

4,802 

 

 -

 

 -

 

 -

 

 -

 

4,802 

Other revenue

 

1,269 

 

2,020 

 

 -

 

134 

 

1,455 

 

(600)

 

4,278 

Total revenues

 

564,662 

 

26,024 

 

47,205 

 

59,102 

 

21,514 

 

(2,815)

 

715,692 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of VOIs sold

 

19,838 

 

 -

 

 -

 

 -

 

 -

 

 -

 

19,838 

Cost of other fee-based services

 

53,983 

 

 -

 

 -

 

 -

 

 -

 

 -

 

53,983 

Cost reimbursements

 

47,157 

 

 -

 

 -

 

 -

 

 -

 

 -

 

47,157 

Cost of trade sales

 

 -

 

 -

 

38,454 

 

34,020 

 

15,583 

 

(12)

 

88,045 

Cost of real estate inventory sold

 

 -

 

11,283 

 

 -

 

 -

 

 -

 

 -

 

11,283 

Interest expense

 

25,470 

 

 -

 

497 

 

 -

 

241 

 

4,661 

 

30,869 

Recoveries from loan losses, net

 

 -

 

(7,258)

 

 -

 

 -

 

 -

 

 -

 

(7,258)

Impairment losses

 

 -

 

362 

 

 -

 

 -

 

187 

 

 -

 

549 

Selling, general and administrative expenses

 

315,535 

 

7,175 

 

7,641 

 

25,559 

 

16,541 

 

37,908 

 

410,359 

Total costs and expenses

 

461,983 

 

11,562 

 

46,592 

 

59,579 

 

32,552 

 

42,557 

 

654,825 

Equity in net earnings of unconsolidated real estate joint ventures

 

 -

 

1,165 

 

 -

 

 -

 

 -

 

 -

 

1,165 

Foreign exchange gain

 

 -

 

 -

 

91 

 

 -

 

 -

 

 -

 

91 

Income (loss) before income taxes

$

102,679 

 

15,627 

 

704 

 

(477)

 

(11,038)

 

(45,372)

 

62,123 







9

 


 

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 Nine Months Ended



 

September 30,

 

September 30,



 

2019

 

2018

 

2019

 

2018

Sales of VOIs

$

66,318 

 

70,698 

 

186,351 

 

195,412 

Provision for loan losses

 

16,411 

 

14,453 

 

39,483 

 

35,926 

Gross Sales of VOI's

 

82,729 

 

85,151 

 

225,834 

 

231,338 

Plus: Fee-based sales

 

87,646 

 

88,155 

 

237,793 

 

246,773 

System-wide sales of VOIs, net

$

170,375 

 

173,306 

 

463,627 

 

478,111 





(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 (1) and a reconciliation of cash flow from operating activities to free cash flow (unaudited) (in thousands):  





 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

For the Three Months Ended

 

For the Nine Months Ended



 

September 30,

 

September 30,



 

2019

 

2018

 

2019

 

2018

Cash flow from operating activities

$

58,100 

 

30,958 

 

60,394 

 

43,587 

Capital expenditures for property and equipment

 

(8,042)

 

(13,243)

 

(26,286)

 

(33,316)

Free cash flow

$

50,058 

 

17,715 

 

34,108 

 

10,271 



The following supplemental table presents Bluegreen’s free cash flow (1) 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 Nine Months Ended



 

September 30,

 

September 30,



 

2019

 

2018

 

2019

 

2018

Cash flow from operating activities

$

38,713 

 

22,527 

 

50,325 

 

45,742 

Capital expenditures for property and equipment

 

(3,986)

 

(9,242)

 

(18,502)

 

(24,347)

Free cash flow

$

34,727 

 

13,285 

 

31,823 

 

21,395 



(1)    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.



10

 


 

The following supplemental table presents Bluegreen’s EBITDA and Adjusted EBITDA(1) and a reconciliation of Bluegreen’s net income to its EBITDA and Adjusted EBITDA (unaudited) (in thousands): 





 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

For the Three Months Ended

 

For the Nine Months Ended



 

September 30,

 

September 30,



 

2019

 

2018

 

2019

 

2018

Net income

$

22,575 

 

24,073 

 

33,392 

 

77,682 

Provision for income taxes

 

7,778 

 

8,443 

 

9,124 

 

24,997 

Income before income taxes

30,353 

 

32,516 

 

42,516 

 

102,679 

Add/(less):

 

 

 

 

 

 

 

 

Interest income (other than interest earned on VOI

 

 

 

 

 

 

 

 

notes receivable)

 

(1,799)

 

(1,407)

 

(5,437)

 

(4,222)

Interest expense (other than interest incurred on debt that is

 

 

 

 

 

 

 

 

      secured by VOI notes receivable

 

5,326 

 

4,207 

 

14,564 

 

11,136 

Franchise taxes

 

112 

 

56 

 

171 

 

180 

Depreciation and amortization

 

3,585 

 

3,169 

 

10,453 

 

9,087 

Bluegreen EBITDA

 

37,577 

 

38,541 

 

62,267 

 

118,860 

EBITDA attributable to the noncontrolling interest

 

 

 

 

 

 

 

 

in Bluegreen/Big Cedar Vacations

 

(2,364)

 

(3,637)

 

(9,339)

 

(9,521)

(Gain) loss on assets held-for-sale

 

(166)

 

18 

 

(2,146)

 

Bass Pro Settlement

 

 -

 

 -

 

39,121 

 

 -

Severance

 

1,924 

 

 -

 

1,924 

 

751 

Adjusted EBITDA

$

36,971 

 

34,922 

 

91,827 

 

110,099 



(1)  Bluegreen’s EBITDA is defined as earnings or net income, before taking into account interest income (excluding interest earned on VOI notes receivable), interest expense (excluding interest expense incurred on financings related to Bluegreen’s receivable-backed notes payable), income and franchise taxes, and depreciation and amortization. For purposes of the EBITDA calculation, 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.



Bluegreen’s Adjusted EBITDA is defined as EBITDA adjusted for amounts attributable to noncontrolling interest in Bluegreen/Big Cedar Vacations (in which Bluegreen has a 51% equity interest) and items that the Company believes are not representative of ongoing operating results.    Accordingly, amounts paid, accrued, or incurred in connection with the Bass Pro settlement in June 2019 were excluded in the computation of Adjusted EBITDA for the nine months ended September 30, 2019.



The Company considers Bluegreen’s EBITDA and Adjusted EBITDA to be an indicator of Bluegreen’s operating performance, and they are used to measure Bluegreen’s ability to service debt, fund capital expenditures and expand its business. 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 Bluegreen’s Adjusted EBITDA to be a useful supplemental measure of Bluegreen’s operating performance 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 Bluegreen's financial performance or as an alternative to cash flow from operating activities as a measure of its liquidity. The Company's computation of Bluegreen’s 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 Bluegreen’s financial performance.

11

 


 

The following supplemental table presents Renin’s EBITDA and Adjusted EBITDA (1) and a reconciliation of Renin’s net income to its EBITDA and Adjusted EBITDA (unaudited) (in thousands): 





 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

For the Three Months Ended

 

For the Nine Months Ended



 

September 30,

 

September 30,



 

2019

 

2018

 

2019

 

2018

Net income from Renin

$

249 

 

518 

$

879 

 

529 

Provision from income taxes

 

230 

 

175 

 

671 

 

175 

Income before income taxes

 

479 

 

693 

 

1,550 

 

704 

Add:

 

 

 

 

 

 

 

 

Interest expense

 

131 

 

157 

 

387 

 

497 

Depreciation and amortization

 

303 

 

492 

 

1,034 

 

1,486 

EBITDA

 

913 

 

1,342 

 

2,971 

 

2,687 

Foreign exchange (gain) loss

 

 -

 

(76)

 

24 

 

(91)

Adjusted EBITDA

$

913 

 

1,266 

$

2,995 

 

2,596 



(1)  Renin’s EBITDA is defined as its earnings, or net income, before taking into account interest expense, income taxes, and depreciation and amortization, including the amortization of product displays provided to customers for marketing purposes that are presented as a reduction of trade sales under GAAP. Renin’s Adjusted EBITDA is defined as EBITDA adjusted for foreign exchange gains and losses, as exchange rates may vary significantly among companies. 



The Company considers Renin’s EBITDA and Adjusted EBITDA to be an indicator of Renin’s operating performance, and they are used to measure Renin’s ability to service debt, fund capital expenditures and expand its business. 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.



The Company considers Renin’s Adjusted EBITDA to be a useful supplemental measure of Renin’s operating performance 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 Renin’s financial performance or as an alternative to cash flow from operating activities as a measure of its liquidity. The Company’s computation of Renin’s EBITDA and Adjusted EBITDA may differ from the methodology utilized by other companies, and investors are cautioned that items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing Renin’s financial performance.



The following supplemental table presents IT’SUGAR’s EBITDA and Adjusted EBITDA (1) and a reconciliation of IT’SUGAR’s net income (loss) to its EBITDA and Adjusted EBITDA (unaudited) (in thousands): 





 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 



 

For the Three Months Ended

 

For the Nine Months Ended



 

September 30,

 

September 30,



 

2019

 

2018

 

2019

 

2018

Net income (loss) from IT'SUGAR

$

1,200 

 

1,564 

$

(580)

 

(477)

Provision from income taxes

 

 -

 

 -

 

 -

 

 -

Income (loss) before income taxes

 

1,200 

 

1,564 

 

(580)

 

(477)

Add/(less):

 

 

 

 

 

 

 

 

Interest income

 

 -

 

 -

 

 -

 

(1)

Interest expense

 

24 

 

 -

 

81 

 

 -

Depreciation and amortization

 

1,181 

 

1,153 

 

3,313 

 

3,327 

EBITDA and Adjusted EBITDA

$

2,405 

 

2,717 

 

2,814 

 

2,849 









(1)  IT’SUGAR’s EBITDA is defined as earnings or net income, before taking into account interest income, interest expense and depreciation and amortization.



The Company considers IT’SUGAR’s EBITDA and Adjusted EBITDA to be an indicator of IT’SUGAR’s operating performance, and they are used to measure IT’SUGAR’s ability to service debt, fund capital expenditures and expand its business. 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.



The Company considers IT’SUGAR’s Adjusted EBITDA to be a useful supplemental measure of IT’SUGAR’s operating performance 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 IT’SUGAR’s financial performance or as an alternative to cash flow from operating activities as a measure of its liquidity. The Company’s computation of IT’SUGAR’s EBITDA and Adjusted EBITDA may differ from the methodology utilized by other companies, and investors are cautioned that items excluded from EBITDA and Adjusted EBITDA are significant components in understanding and assessing IT’SUGAR’s financial performance.

12

 


 

The following supplemental table presents BBX Capital’s EBITDA and Adjusted EBITDA (1) 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 Nine Months Ended



 

September 30,

 

September 30,



 

2019

 

2018

 

2019

 

2018

Net income