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Press Release: Bluegreen Corporation
October 27, 2004
BOCA RATON, FL -- Bluegreen Corporation (NYSE:BXG), a leading U.S. developer and marketer of drive-to vacation
ownership resorts ("Bluegreen Resorts") and planned residential and golf communities ("Bluegreen
Communities"), yesterday announced record financial results for the third quarter and nine months ended September
30, 2004 (see attached tables).
George F. Donovan, President and Chief Executive Officer of Bluegreen®, commented, "Total operating revenues
and net income for the first nine months of 2004 exceeded total operating revenues and net income for all of 2003.
We are very pleased with the current pace of sales of new and existing Resort and Communities properties. The quality
of these properties, the effectiveness of our marketing programs and the dedication of our people are driving the
growth of the Bluegreen Vacation Club®. Membership in the Club rose 20% to approximately 90,000 members during
the first nine months of 2004 from approximately 75,000 members at December 31, 2003."
RECORD NET INCOME
Net income for the third quarter of 2004 increased 60% to $16.3 million, or $.54 per diluted share, on approximately
30.6 million weighted average common and common equivalent diluted shares outstanding ("shares outstanding"),
compared to net income of $10.2 million, or $.36 per diluted share, on approximately 29.4 million shares outstanding,
for the same period last year. Net income for the first nine months of 2004 rose 62% to $30.1 million, or $1.02
per diluted share, on approximately 30.6 million shares outstanding, from net income of $18.6 million, or $.68
per diluted share, on approximately 29.1 million shares outstanding, for the same period last year.
Record net income for the 2004 three and nine month periods included a one-time, pre-tax settlement expense of
$1.3 million, or $0.03 per diluted share, related to a previously disclosed sales tax assessment with the State
of Wisconsin Department of Revenue ("DOR"). Bluegreen believes this to be a favorable settlement and
is pleased to have resolved this matter with the DOR.
RECORD RESORTS AND COMMUNITIES RESULTS
Resorts sales in the third quarter of 2004 increased 15% to a record $96.1 million from $83.9 million in the same
period last year. Resorts sales for the first nine months of 2004 rose 23% to $235.9 million from $191.1 million
for the comparable prior year period.
Higher sales in both periods were due primarily to double-digit same-Resort sales increases at many of Bluegreen's
sales offices, including: Harbour Lights(TM) in Myrtle Beach, SC; Big Cedar® Wilderness Club(TM) located just
outside of Branson, MO; Christmas Mountain Village(TM) in Wisconsin Dells, WI; MountainLoft(TM) in Gatlinburg,
TN; and Laurel Crest(TM) in Pigeon Forge, TN. The Company also experienced strong sales at properties opened less
than 12 months, namely The Fountains(TM) resort in Orlando, FL and Grande Villas at World Golf Village® in
St. Augustine, FL, as well as at its new offsite sales office in Destin, FL.
Communities sales in the third quarter of 2004 increased 163% to a record $65.8 million from $25.0 million in the
same period last year. For the first nine months of 2004, Communities sales rose 114% to $140.5 million from $65.7
million in the same period last year.
Higher communities sales were the result of strong sales of communities opened for less than 12 months, including:
Chapel Ridge(TM), a Bluegreen Golf Community located in Chatham County, NC; Sanctuary Cove at St. Andrews Sound(TM),
a Bluegreen Golf Community located in Brunswick, GA; and Mountain Springs Ranch(TM), in the Texas Hill Country.
These sales increases were supported by solid same-project sales growth at: Brickshire(TM), a Bluegreen Golf Community
located near Richmond, VA; Catawba Falls Preserve(TM), in Black Mountain, NC; Mystic Shores(TM) in Spring Branch,
TX; Ridge Lake Shores(TM) near Houston, TX; and Quail Springs Ranch(TM) in Peaster, TX.
Recognition of Communities sales in the third quarter of 2004 was impacted positively by approximately $2.8 million,
due to the effect of percentage-of-completion accounting.
As of September 30, 2004, approximately $34.3 million and $13.8 million of sales and profits, respectively, were
deferred under the percentage-of-completion method of accounting. Significantly all of these deferred sales and
profits were related to the Communities business. It is expected that these amounts will be recognized in future
periods ratably with the development of the projects.
OTHER REVENUES
Total positive net interest spread (interest income less interest expense) was $2.8 million in the third quarter
of 2004 as compared to $791,000 in the third quarter of 2003. Interest income increased primarily as a result of
a higher average portfolio of vacation ownership notes receivable during the third quarter of 2004 compared to
the same period one year ago, while interest expense declined primarily as a result of more interest being capitalized
due to increased resort construction activity.
Gain on sale of notes receivable in the third quarter of 2004 increased to $3.3 million from $476,000 in the same
period last year, due primarily to the completion of the previously announced $156.6 million private offering of
timeshare receivable-backed securities. In addition, $45.2 million of timeshare receivables were sold during the
third quarter of 2004 compared to $8.4 million in the third quarter of 2003.
THIRD QUARTER OPERATING METRICS
Despite a 49% increase in total sales and a 48% increase in total operating revenues, selling, general and administrative
expenses ("S,G&A") as a percentage of these sales declined during the third quarter of 2004 versus
both the prior year period and the second quarter of 2004. During the 2004 third quarter, S,G&A as a percentage
of total sales declined to 48% from 54% in the third quarter of 2003 and from 52% from the second quarter of 2004.
S,G&A as a percentage of total operating revenues declined to 41% from 46% in the third quarter of 2003 and
from 44% in the second quarter of 2004.
FINANCIAL POSITION
Bluegreen's balance sheet at September 30, 2004 reflected a book value of $8.60 per share, compared to a book value
of $7.50 per share at December 31, 2003, and a debt-to-equity ratio of 1.08:1 as compared to 1.38:1 at December
31, 2003. From December 31, 2003 through September 30, 2004, holders of $6.8 million in principal amount of Bluegreen's
8.25% Convertible Subordinated Debentures due 2012 elected to convert their holdings into shares of the Company's
common stock at a conversion price of $8.24 per share.
On September 30, 2004, Bluegreen extended through September 29, 2005 its previously disclosed $100 million revolving
vacation ownership receivables purchase facility with Resort Finance LLC ("Resort Finance"). On September
29, 2004, Bluegreen sold $25.9 million in vacation ownership receivables to Resort Finance pursuant to the terms
of this agreement for net proceeds of $22.0 million in cash. These proceeds will be used for general operating
purposes. Based on this sale, the remaining availability under the Resort Finance purchase facility is $78.0 million.
The Resort Finance facility along with the previously announced $125 million vacation ownership receivables purchase
facility through GE Commercial Finance Real Estate, will continue to provide liquidity from Bluegreen's vacation
ownership receivables portfolio.
ABOUT BLUEGREEN CORPORATION
Bluegreen is one of the leading companies engaged in the acquisition, development, marketing and sale of vacation
ownership resorts and residential homesites. Bluegreen Resorts are located in a variety of popular vacation destinations,
including: Marathon, Florida; Orlando, Florida; Ormond Beach, Florida; St. Augustine, Florida; Surfside, Florida;
the Smoky Mountains of Tennessee; Myrtle Beach, South Carolina; Charleston, South Carolina; Wisconsin Dells, Wisconsin;
Gordonsville, Virginia; Hershey, Pennsylvania; Branson, Missouri; Ridgedale, Missouri; Boyne Falls, Michigan; and
Aruba, while Bluegreen Communities are predominantly located in the Southeastern and Southwestern United States.
This press release contains forward-looking statements and the Company desires to take advantage of the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995 in connection with these statements.
Statements contained herein are not statements of historical fact may be deemed forward-looking statements. The
words "believe," "expect," "intend," "anticipate," "project,"
"may," "should," "designed to," "estimate," "hope," "plan"
and similar expressions identify forward-looking statements, which speak only as of the date the statement was
made. The Company does not undertake and specifically disclaims any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking
statements are based on current expectations and assumptions and are inherently subject to risks and uncertainties,
some of which cannot be predicted or quantified and many of which are beyond the Company's control. Future events
could differ materially from those set forth in, contemplated by, or underlying such forward-looking statements.
The risks and uncertainties to which forward-looking statements are subject to include, but are not limited to,
the following: general economic conditions, the continued success of Bluegreen's sales and marketing strategies,
the continued acceptance of the Bluegreen Vacation Club, that S,G&A as a percentage of sales or operating revenues
may increase, that the timeshare purchase facilities will not be available pursuant to their terms or that future
sales contemplated under the timeshare purchase facilities referred to above will not be consummated, and other
risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including
its most recent Form 10-K filed on March 29, 2004 and its Quarterly Report on Form 10-Q to be filed on or about
November 15, 2004.
"World Golf Village" is a registered trademark of World Golf Foundation, Inc.
BLUEGREEN CORPORATION
Condensed Consolidated Income Statements
(In 000's, Except Per Share Data)
(unaudited)
Three Months Ended Nine Months Ended
--------------------- ---------------------
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2004 2003 2004 2003
---------- ---------- ---------- ----------
REVENUES:
---------
Vacation ownership sales $ 96,104 $ 83,925 $ 235,888 $ 191,060
Home site sales 65,794 25,016 140,515 65,689
---------- ---------- ---------- ----------
Total sales 161,898 108,941 376,403 256,749
Other resort and
communities operations
revenue 19,662 14,549 52,376 42,592
Interest income 5,743 4,441 15,484 12,308
Gain on sale of notes
receivable 3,333 476 6,929 3,360
Other income, net - - - 608
---------- ---------- ---------- ----------
Total operating revenues 190,636 128,407 451,192 315,617
---------- ---------- ---------- ----------
EXPENSES:
---------
Cost of sales:
Vacation ownership cost
of sales 23,873 16,464 55,479 39,327
Home site cost of sales 34,914 14,569 76,374 37,039
---------- ---------- ---------- ----------
Total cost of sales 58,787 31,033 131,853 76,366
Cost of other resort and
communities operations 20,198 14,829 53,396 44,122
Selling, general and
administrative expense 78,339 58,792 195,895 147,933
Interest expense 3,242 3,650 11,339 9,626
Provision for loan losses 2,603 2,300 6,502 5,525
Other expense 591 515 556 -
---------- ---------- ---------- ----------
Total operating expenses 163,760 111,119 399,541 283,572
---------- ---------- ---------- ----------
Income before minority
interest and provision
for income tax 26,876 17,288 51,651 32,045
Minority interest in
income of consolidated
subsidiary 360 699 2,692 1,875
---------- ---------- ---------- ----------
Income before provision
for income taxes 26,516 16,589 48,959 30,170
Provision for income taxes 10,209 6,387 18,849 11,615
---------- ---------- ---------- ----------
Net income $ 16,307 $ 10,202 $ 30,110 $ 18,555
========== ========== ========== ==========
Net income per share:
Basic: $ 0.62 $ 0.41 $ 1.16 $ 0.75
========== ========== ========== ==========
Diluted: $ 0.54 $ 0.36 $ 1.02 $ 0.68
========== ========== ========== ==========
Weighted average number of
common and
common equivalent
shares:
Basic 26,298 24,590 25,858 24,589
========== ========== ========== ==========
Diluted 30,646 29,377 30,563 29,089
========== ========== ========== ==========
BLUEGREEN CORPORATION
Condensed Consolidated Balance Sheets
(in 000's)
September 30, December 31,
2004 2003
ASSETS (Unaudited)
Cash and cash equivalents (unrestricted) $ 66,704 $ 39,491
Cash and cash equivalents (restricted) 44,015 33,540
Contracts receivable, net 43,631 25,522
Notes receivable, net 120,598 94,194
Other assets 37,160 33,364
Inventory, net 197,924 219,890
Retained interests in notes receivable
sold 67,678 60,975
Property and equipment, net 70,790 63,430
-------------- --------------
Total assets $ 648,500 $ 570,406
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable, accrued liabilities
and other $ 81,853 $ 59,158
Deferred income 26,384 18,646
Deferred income taxes 62,271 43,924
Lines-of-credit and notes payable 106,737 112,779
10.50% senior secured notes payable 110,000 110,000
8.25% convertible subordinated
debentures 27,590 34,371
-------------- --------------
Total liabilities 414,835 378,878
Minority interest 7,340 4,648
Total shareholders' equity 226,325 186,880
-------------- --------------
Total liabilities and shareholders'
equity $ 648,500 $ 570,406
============== ==============
---------------------------------------------
Contact:
Bluegreen Corporation
John Chiste, 561-912-8010
Chief Financial Officer
john.chiste@bxgcorp.com
or
Investor Relations Counsel:
The Equity Group Inc.
Devin Sullivan, 212-836-9608
dsullivan@equityny.com
Adam Prior, 212-836-9606
aprior@equityny.com
Source: Bluegreen Corporation