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| Bluegreen Corporation Reports 2007 Fourth Quarter and Year-End Results |
Total sales in the fourth quarter of 2007 rose 7.6% to $136.6 million from $126.9 million in the same period last year, due to record vacation ownership ("Resorts") sales and higher homesite ("Bluegreen Communities") sales. Bluegreen Resorts and Bluegreen Communities yielded Field Operating Profit (1) of $22.6 million and $3.7 million, respectively, during the fourth quarter of 2007 (see tables entitled "Supplemental Segment Financial Data"). Net income in the fourth quarter of 2007 increased to $8.5 million, or $0.27 per diluted share, from net income of $1.8 million, or $0.06 per diluted share, in the same period last year. As previously announced, certain expenses reduced income for the fourth quarter of 2006 by approximately $5.4 million, or $0.17 per diluted share. (1) Field operating profit is defined as operating profit prior to the allocation of corporate overhead, interest income, other expense, interest expense, and income taxes. BLUEGREEN RESORTS Bluegreen Resorts sales increased 8.5% to a fourth quarter record $112.0 million from $103.3 million in the fourth quarter of 2006. Higher Resorts sales were primarily attributable to a significant increase in sales to existing Bluegreen Vacation Club(R) owners as compared to the fourth quarter of 2006; these sales comprised 44% of Resorts sales for the fourth quarter of 2007 as compared to 38% of Resorts sales during the comparable prior year period. Higher Resorts sales were also attributable to increased same-resort sales, led by increases in sales at the Smoky Mountain Preview Center in Sevierville, Tenn., The Falls Village(TM) resort in Branson, Mo., and an offsite sales office in Las Vegas. Higher sales were also attributable, to a lesser extent, to the opening of new sales offices at SeaGlass Tower(TM), located in Myrtle Beach, S.C., as well as an 8% system-wide price increase that went into effect during March 2007. Results for the fourth quarter of 2007 also included a gain on sales of notes receivable of $11.3 million, which, as required by generally accepted accounting principles, is reflected as a $10.3 million increase in Resorts sales with an additional $1.0 million reflected as revenue from sales of notes receivable. This compares to a $13.4 million gain on sales of notes receivable in the fourth quarter of 2006, reflected as a $11.6 million increase in Resorts sales and $1.8 million of revenue from sales of notes receivable. In accordance with Statement of Financial Accounting Standards No. 152, "Accounting for Real Estate Time-sharing Transactions" ("SFAS 152"), as of December 31, 2007 approximately $24.6 million and $14.3 million of Resorts sales and profits, respectively, were deferred as these contracted sales had not yet met the requirements for revenue recognition. These amounts compare to $32.9 million and $18.5 million of Resorts sales and profits, respectively, which were deferred as of September 30, 2007. Deferred amounts are expected to be recognized in future periods. In addition, SFAS 152 requires that Resorts sales be reduced by estimated uncollectible timeshare notes receivable, which were estimated to be $19.1 million for the fourth quarter of 2007 and $15.5 million for the fourth quarter of 2006. Resorts cost of sales, as a percentage of sales, in the fourth quarter of 2007 rose to 24.6% from 22.6% in the fourth quarter of 2006, primarily as a result of a higher percentage of Resorts sales in relatively higher cost properties. Resorts cost of sales as a percentage of sales for 2008 is expected to range between 23% and 27%. John M. Maloney Jr., President and Chief Executive Officer of Bluegreen, commented, "Bluegreen Resorts ended a successful 2007 with strong fourth quarter results, which we view as a reflection of our continued success at servicing our customers while providing a cost-effective, flexible, and high-quality vacation ownership product. We continue to monitor the overall economy but are currently cautiously optimistic, based, in part, on our industry's results during prior economic downturns. Summer 2008 will mark two significant milestones, as we expect to begin welcoming guests and opening permanent sales offices at our newest properties in Las Vegas, NV and Williamsburg, VA. "We believe that during 2007, Bluegreen further enhanced its marketing capabilities and expanded the offerings of the Bluegreen Vacation Club through strategic alliances. The Company extended its historically successful marketing alliance and joint venture with Bass Pro, Inc. and its affiliates for a seven-year term ending in 2014. Bluegreen also entered into an agreement with Shell Vacation Club, a privately-held timeshare developer, which provides for dual owner access to our respective resort properties, subject to applicable terms and conditions. This new arrangement, known as "Select Connections," increases our owners' vacation choices to include 18 Shell resort locations and enhances our presence in the western United States (including Hawaii), and Canada." BLUEGREEN COMMUNITIES Sales at Bluegreen Communities increased 4.0% to $24.6 million from $23.6 million during the same period last year, reflecting $4.1 million in sales made prior to the fourth quarter of 2007 that were previously deferred pending the completion of the platting process, partially offset by lower sales in certain markets. Bluegreen Communities cost of sales, as a percentage of sales, in the fourth quarter of 2007 declined to 51.2% from 62.3% in the same period one year ago. Bluegreen Communities cost of sales in the fourth quarter of 2006 was negatively impacted by a $3.0 million accrual associated with repairs required to be made on a lake amenity at a nearly sold-out Bluegreen community. Mr. Maloney commented, "We are very pleased that Communities continued to operate profitably for the 2007 year and fourth quarter despite a difficult real estate market that has negatively impacted some of our Communities sales operations. We are pleased that, to date, we have continued to sell homesites at retail prices that are comparable to prior year's pricing. We are continuing to manage this important segment of our business in light of current market demand through the development of new sales and marketing initiatives and, by design, expect that it will comprise a smaller portion of Bluegreen's consolidated results in 2008. New land purchases will be selective and, as always, our goal is to adhere to a strict economic model. We believe that this deliberate approach is evidenced by our results and that our current portfolio of properties was acquired at prices that we believe can generate profitable returns despite the current market environment." As of December 31, 2007, approximately $13.2 million and $5.5 million of Bluegreen Communities sales and profits, respectively, were deferred under the percentage-of-completion method of accounting. It is expected that these amounts will be recognized in future periods ratably with the development of the communities. These amounts compare to $14.3 million and $6.3 million of sales and profits, respectively, deferred as of September 30, 2007. Therefore, net recognition in the fourth quarter of 2007 of revenues and profits previously deferred under the percentage of completion method of accounting totaled $1.1 million and $800,000, respectively. In the fourth quarter of 2006, net deferral of revenue and profits previously deferred under the percentage-of-completion method of accounting totaled $1.4 million and $1.1 million, respectively.
SELECTED OTHER FINANCIAL INFORMATION
----------------------------------------------------------------------
As of or for the three months ended
December 31,
2007 2006
-----------------------------------------
Unrestricted cash $ 125.5 million $ 49.7 million
Net interest spread (2) $ 4.5 million $ 4.7 million
Book value $ 12.34 per share $ 11.44 per share
Debt-to-equity ratio 1.03:1 0.82:1
(2) interest income minus interest expense As previously announced, Bluegreen intends to pursue a rights offering to its shareholders of up to $100 million of its common stock. The purpose of the rights offering is to further strengthen the Company's balance sheet in light of the $55 million of senior secured notes which mature in April 2008, and to support organic and acquisition-driven growth initiatives to maximize shareholder value. Mr. Maloney commented, "Bluegreen continues to maintain a high level of liquidity -- as evidenced by our cash position at December 31, 2007 - and we believe that we enjoy excellent relationships with our lenders and securitization investors. In October 2007, we completed a $177 million term securitization and in August 2007 we renewed and increased our revolving line of credit with Wachovia Bank, NA. Our financial position and relationships combine to provide a sound financial foundation in support of our day-to-day operations. Our vacation ownership receivables portfolio continues to perform well. Delinquencies over 30 days and average annual default rates at December 31, 2007 remained generally consistent to December 31, 2006, and below historical amounts." 2007 FINANCIAL RESULTS Total sales for the twelve months ended December 31, 2007 increased 3.5% to $582.8 million from total sales of $563.1 million in 2006. Resorts sales rose 13.6% to $453.5 million from $399.1 million last year. Bluegreen Communities sales during 2007 were $129.2 million, a decrease from sales of $164.0 million during 2006. Bluegreen Communities sales in 2006 included $7.0 million of revenue related to the bulk sale of land in California on a non-retail basis; there was no such sale in 2007. Net income for 2007 rose to $31.9 million, or $1.02 per diluted share, from net income of $29.8 million, or $0.96 per diluted share, in 2006. Net income for 2006 included a cumulative effect of change in accounting principle charge, net of income taxes and minority interest, totaling $4.5 million, or $0.14 per diluted share; there was no such charge in 2007. As noted earlier, net income for 2006 was also impacted by approximately $5.4 million, or $0.17 per diluted share, due to certain expenses incurred during the fourth quarter of that year. CONFERENCE CALL Bluegreen Corporation will host a conference call on Friday, February 29, 2008 at 11:00 am ET to discuss this news release. Interested parties may participate in the call by dialing (888) 713-4213 (Domestic) or (617) 213-4865 (International) and use the code 45332516 approximately 10 minutes before the call is scheduled to begin, and ask to be connected to the Bluegreen conference call. A recorded replay of the call will be available until March 7, 2008. Listeners may dial (888) 286-8010 (Domestic) or (617) 801-6888 (International) and use the code 89533141 for the replay. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key= PKFF87XML. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.) Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference by bypassing the operator upon connection. In addition, the conference call will be broadcast live over the Internet at Bluegreen's corporate web site, www.bluegreencorp.com. To listen to the live call on the Internet, go to the web site at least 15 minutes early to register, download and install any necessary audio software. If you are unable to participate in the live call, the conference call will be archived and can be accessed on Bluegreen Corporation's web site for approximately 90 days. ABOUT BLUEGREEN CORPORATION Bluegreen Corporation (NYSE:BXG) is a leading provider of Colorful Places to Live and Play(R) through two principal operating divisions. With more than 185,000 owners, Bluegreen Resorts markets a flexible, real estate-based vacation ownership plan that provides access to over 40 resorts and an exchange network of over 3,700 resorts and other vacation experiences such as cruises and hotel stays. Bluegreen Communities has sold over 56,300 planned residential and golf community homesites in 32 states since 1985. Founded in 1966, Bluegreen is headquartered in Boca Raton, Fla., and currently employs over 6,000 associates. More information about Bluegreen is available at www.bluegreencorp.com. Statements in this release may constitute forward looking statements and are made pursuant to the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. Forward looking statements are based largely on expectations and are subject to a number of risks and uncertainties including but not limited to the risks and uncertainties associated with economic, competitive and other factors affecting the Company and its operations, markets, products and services, as well as the risk that growth and profitability will not occur as anticipated; the Company may be unable to sell notes receivable on satisfactory terms, if at all, adversely impacting the Company's liquidity and profitability; the performance of the Company's vacation ownership notes receivables may deteriorate in the future; the Company may not be in a position to draw down on its existing credit lines or may be unable to renew or replace such lines of credit; real estate inventories, notes receivable, retained interests in notes receivable sold or other assets will be determined to be impaired in the future; risks relating to pending or future litigation, claims and assessments; that the Company will not be able to acquire land or identify new projects, as anticipated; sales and marketing strategies related to new Resorts and Communities properties will not be as successful as anticipated; new Resort and Communities properties will not open when expected, will cost more to develop or may not be as successful as anticipated; retail prices and homesite yields for Communities properties will be below the Company's estimates; cost of sales will not be as expected; sales to existing owners will not continue at current levels; deferred sales will not be recognized to the extent or at the time anticipated; and the risks and other factors detailed in the Company's SEC filings, including its most recent Annual Report on Form 10-K filed on March 16, 2007, its Form 10-K/A filed on July 3, 2007 and its most recent Form 10-Q filed on November 9, 2007. Matters discussed in this press release contain 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"), that involve substantial risks and uncertainties, including but not limited to the risk that a registration statement relating to Bluegreen's rights offering may not be filed or declared effective by the Securities and Exchange Commission, that because of business, economic or market conditions Bluegreen may decide not to pursue the rights offering and that the rights offering may not be consummated in the amounts contemplated, if at all. In addition to the risks and uncertainties identified above, reference is also made to other risks and uncertainties detailed in reports filed by Bluegreen with the Securities and Exchange Commission. The Company cautions that the foregoing factors are not exclusive.
BLUEGREEN CORPORATION
Condensed Consolidated Statements of Income
(In 000's, Except Per Share Data)
Three Months Ended Year Ended
----------------------- ------------------------
December December December 31, December
31, 31, 31,
2007 2006 2007 2006
----------- ----------- ------------ -----------
(unaudited) (unaudited) (unaudited)
REVENUES:
---------------------
Gross vacation
ownership sales $ 120,834 $ 107,175 $ 476,033 $ 419,754
Estimated
uncollectible VOI
notes receivable (19,144) (15,497) (65,242) (59,497)
Gain on sales of
notes receivable
(Resort sales
portion) 10,331 11,596 42,750 38,848
----------- ----------- ------------ -----------
Vacation ownership
sales 112,021 103,274 453,541 399,105
Homesite sales 24,571 23,616 129,217 164,041
----------- ----------- ------------ -----------
Total sales 136,592 126,890 582,758 563,146
Other resort and
communities
operations revenue 19,548 14,820 67,411 63,610
Interest income 10,412 10,073 44,703 40,765
Sales of notes
receivable 999 1,803 (3,378) 5,852
----------- ----------- ------------ -----------
Total operating
revenues 167,551 153,586 691,494 673,373
----------- ----------- ------------ -----------
EXPENSES:
---------------------
Cost of sales:
Vacation ownership
cost of sales 27,553 23,370 111,480 88,086
Homesite cost of
sales 12,581 14,713 67,251 90,968
----------- ----------- ------------ -----------
Total cost of sales 40,134 38,083 178,731 179,054
Cost of other resort
and communities
operations 11,919 10,424 49,982 53,193
Selling, general and
administrative
expenses 92,791 92,934 377,551 356,989
Interest expense 5,892 5,423 24,272 18,785
Other expense, net 618 1,619 1,743 2,861
----------- ----------- ------------ -----------
Total operating
expenses 151,354 148,483 632,279 610,882
----------- ----------- ------------ -----------
Income before
minority interest
and provision for
income taxes 16,197 5,103 59,215 62,491
Minority interest in
income of
consolidated
subsidiary 2,410 2,379 7,721 7,319
----------- ----------- ------------ -----------
Income before
provision for income
taxes 13,787 2,724 51,494 55,172
Provision for income
taxes 5,239 930 19,568 20,861
----------- ----------- ------------ -----------
Income before
cumulative effect of
change in
accounting
principle 8,548 1,794 31,926 23,3 34,311
Cumulative effect of
change in accounting
principle, net of
tax -- -- -- (5,678)
Minority interest in
cumulative effect of
change in accounting
principle, net of
tax -- -- -- 1,184
----------- ----------- ------------ -----------
Net income $ 8,548 $ 1,794 $ 31,926 $ 29,817
=========== =========== ============ ===========
Income before
cumulative effect of
change in accounting
principle per share:
Basic: $ 0.28 $ 0.06 $ 1.03 $ 1.12
Diluted: $ 0.27 $ 0.06 $ 1.02 $ 1.10
Cumulative effect of
change in accounting
principle, per share
Basic: $ -- $ -- - $ -- $ (0.15)
Diluted: $ -- $ -- $ -- $ (0.14)
Net income per share:
Basic: $ 0.28 $ 0.06 $ 1.03 $ 0.98
=========== =========== ============ ===========
Diluted: $ 0.27 $ 0.06 $ 1.02 $ 0.96
=========== =========== ============ ===========
Weighted average
number of common and
common equivalent
shares:
Basic 31,009 30,639 30,975 30,557
=========== =========== ============ ===========
Diluted 31,256 31,151 31,292 31,097
=========== =========== ============ ===========
BLUEGREEN CORPORATION
Supplemental Segment Financial Data
Three- and Twelve-Month Periods Ended December 31, 2007 and December
31, 2006
(In 000s, except percentages)
BLUEGREEN RESORTS
-----------------
% of % of
Q4 2007 Sales Q4 2006 Sales
----------- ------ ----------- -----
(unaudited) (unaudited)
Gross sales of real estate $ 120,834 $ 107,175
Estimated uncollectible VOI
notes receivable (19,144) (15,497)
Gain on sales of notes
receivable (Resort sales
portion) 10,331 11,596
----------- -----------
Sales of real estate 112,021 100% 103,274 100%
Cost of sales on real estate (27,553) (25) (23,370) (23)
----------- ------ ----------- -----
Gross profit on real estate 84,468 75 79,904 77
Sales of other services 14,151 100 12,325 100
Cost of sales of other services (6,970) (49) (7,966) (65)
----------- ------ ----------- -----
Gross profit on other services 7,181 51 4,359 35
Selling and marketing expense (61,999) (55) (59,772) (58)
Field G & A expense (7,067) (6) (7,201) (7)
----------- ------ ----------- -----
Total field operating expense (69,066) (61) (66,973) (65)
----------- ------ ----------- -----
Field operating profit $ 22,583 20% $ 17,290 17%
=========== ====== =========== =====
% of % of
2007 Sales 2006 Sales
----------- ------ ----------- -----
(unaudited)
Gross sales of real estate $ 476,033 $ 419,754
Estimated uncollectible VOI notes
receivable (65,242) (59,497)
Gain on sales of notes receivable
(Resort sales portion) 42,750 38,848
----------- -----------
Sales of real estate 453,541 100% 399,105 100%
Cost of sales on real estate (111,480) (25) (88,086) (22)
----------- ------ ----------- -----
Gross profit on real estate 342,061 75 311,019 78
Sales of other services 53,624 100% 51,688 100%
Cost of sales of other services (36,588) (68) (42,417) (82)
----------- ------ ----------- -----
Gross profit on other services 17,036 32 9,271 18
Selling and marketing expense (260,932) (58) (239,788) (60)
Field G & A expense (28,256) (6) (26,565) (7)
----------- ------ ----------- -----
Total field operating expense (289,188) (64) 266,353 (67)
----------- ------ ----------- -----
Field operating profit $ 69,909 15% $ 53,937 14%
=========== ====== =========== =====
BLUEGREEN COMMUNITIES
---------------------
% of % of
Q4 2007 Sales Q4 2006 Sales
----------- ------ ----------- -----
(unaudited) (unaudited)
Sales of real estate $ 24,571 100% $ 23,616 100%
Cost of sales of real estate (12,581) (51) (14,713) (62)
----------- ------ ----------- -----
Gross profit on real estate 11,990 49 8,903 38
Sales of other services 5,397 100 2,495 100
Cost of sales of other services (4,949) (92) (2,458) (99)
----------- ------ ----------- -----
Gross profit on other services 448 8 37 1
Selling and marketing expense (5,999) (24) (5,882) (25)
Field G & A expense (2,690) (11) (2,718) (12)
----------- ------ ----------- -----
Total field operating expense (8,689) (35) (8,600) (37)
----------- ------ ----------- -----
Field operating profit $ 3,749 15% $ 340 1%
=========== ====== =========== =====
% of % of
2007 Sales 2006 Sales
----------- ----- --------- -----
(unaudited)
Sales of real estate $ 129,217 100% $ 164,041 100%
Cost of sales of real estate (67,251) (52) (90,968) (55)
----------- ----- --------- -----
Gross profit on real estate 61,966 48 73,073 45
Sales of other services 13,787 100 11,922 100
Cost of sales of other services (13,394) (97) (10,776) (90)
----------- ----- --------- -----
Gross profit on other services 393 3 1,146 10
Selling and marketing expense (27,934) (22) (27,636) (6)
Field G & A expense (10,792) (8) (10,759) (17)
----------- ----- --------- -----
Total field operating expense (38,726) (30) (38,395) (23)
----------- ----- --------- -----
Field operating profit $ 23,633 18% $ 35,824 22%
=========== ===== ========= =====
BLUEGREEN CORPORATION
Reconciliation of Field Operating Profit to Income Before
Minority Interest and Provision for Income Taxes
Three Months Ended Year Ended
----------------------- ----------------------
December December December December
31, 31, 31, 31,
----------- ----------- ----------- ----------
2007 2006 2007 2006
----------- ----------- ----------- ----------
(unaudited) (unaudited) (unaudited)
Field operating profit
for Bluegreen Resorts $ 22,583 $ 17,290 $ 69,909 $ 53,937
Field operating profit
for Bluegreen
Communities 3,749 340 23,633 35,824
Interest Income 10,412 10,073 44,703 40,765
Sales of notes
receivable 999 1,803 (3,378) 5,852
Other expense, net (618) (1,619) (1,743) (2,861)
Corporate general and
administrative
expenses (15,036) (17,361) (49,637) (52,241)
Interest expense (5,892) (5,423) (24,272) (18,785)
----------- ----------- ----------- ----------
Income before minority
interest and provision
for income taxes $ 16,197 $ 5,103 $ 59,215 $ 62,491
=========== =========== =========== ==========
BLUEGREEN CORPORATION
Condensed Consolidated Balance Sheets
(In 000s)
December 31, December 31,
2007 2006
------------ ------------
ASSETS (unaudited)
Cash and cash equivalents (unrestricted) $ 125,513 $ 49,672
Cash and cash equivalents (restricted) 19,460 21,476
------------ ------------
Total cash and cash equivalents 144,973 71,148
Contracts receivable, net 20,532 23,856
Notes receivable, net 160,665 144,251
Prepaid expenses 14,824 10,800
Other assets 23,405 27,465
Inventory, net 434,968 349,333
Retained interests in notes receivable sold 141,499 130,623
Property and equipment, net 94,421 92,445
Goodwill 4,291 4,291
------------ ------------
Total assets $1,039,578 $ 854,212
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable $ 38,901 $ 18,465
Accrued liabilities and other 60,421 49,458
Deferred income 36,559 40,270
Deferred income taxes 98,362 87,624
Receivable-backed notes payable 54,999 21,050
Lines-of-credit and notes payable 176,978 124,412
10.50% senior secured notes 55,000 55,000
Junior subordinated debentures 110,827 90,208
------------ ------------
Total liabilities 632,047 486,487
Minority interest 22,423 14,702
Total shareholders' equity 385,108 353,023
------------ ------------
Total liabilities and shareholders' equity $1,039,578 $ 854,212
============ ============
SOURCE: Bluegreen Corporation Bluegreen Corporation Tony Puleo, 561-912-8270 Chief Financial Officer tony.puleo@bluegreencorp.com -OR- Investor Relations: The Equity Group Inc. Devin Sullivan, 212-836-9608 Senior Vice President dsullivan@equityny.com |
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