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Press Release: BFC Financial Corporation
November 16, 2006
FORT LAUDERDALE, FL -- BFC Financial Corporation (NYSE: BFF), a diversified holding company that invests in and
acquires operating businesses in a variety of industries, Nov. 14 announced financial results for the third quarter
2006. For the quarter ended September 30, 2006, BFC Financial Corporation ("BFC" or "the Company")
had a net loss allocable to common stock of $1.4 million or a diluted loss per share of ($0.04), compared with
net income allocable to common stock of $1.9 million, or $0.05 per diluted share reported in the third quarter
2005. Year-to-date, the Company reported a net loss allocable to common stock of $2.1 million or a diluted loss
per share of ($0.06), compared to net income allocable to common stock of $8.6 million, or $0.27 per diluted share
reported for the nine months ended September 30, 2005.
As a holding company with limited operations, BFC's financial results primarily reflect the results of the operating
companies in which it has its principal investments. The Company's results for the period reflect the lower earnings
of its principal holdings, BankAtlantic Bancorp and Levitt Corporation. Further, both companies are implementing
strategic long-term initiatives that generally reduce shorter-term earnings performance. Levitt Corporation's results
were impacted by the adverse market conditions in the homebuilding industry, while BankAtlantic's results were
impacted by the losses at its wholly-owned investment banking and brokerage subsidiary, Ryan Beck and higher operating
expenses in connection with BankAtlantic's store expansion initiatives. While BankAtlantic Bancorp and Levitt Corporation
anticipate their respective initiatives will position each company for future growth and improved profitability,
these strategies have a negative impact on each company's current financial results. As a long-term investor, BFC
supports its portfolio companies' efforts to build and strengthen their respective businesses with a goal of achieving
long-term sustainable earnings growth.
Developments during the quarter at each of the companies include:
BankAtlantic Bancorp:
* BankAtlantic's 'Florida's Most Convenient Bank' initiatives produced
continued growth in new customers, with 62,000 and 197,000 new low cost
deposit accounts opened in the third quarter of 2006 and year-to-date
2006, respectively, an increase of 21% and 27% over the number of
accounts opened in the corresponding 2005 quarter. Balances of these new
accounts have aggregated approximately $443 million year-to-date. At
quarter end, "total bank" and "same store" low cost deposit balances
increased 5.5% and 5.3%, respectively, compared to the third quarter
2005, an increase of $110 million in low cost deposit balances. As noted
in earlier quarters, growth in balances in new low cost accounts remains
very strong, but declines in legacy balances have negatively impacted
growth in net aggregate balances. Demand deposits declined slightly to
27.5% of total deposits from 29.2% in the second quarter 2006. Year-
over-year, low cost deposit balances rose to 57.3% of total deposits, up
from 54.0% in the third quarter of 2005.
* BankAtlantic previously announced its store expansion program for the
next two years, including the anticipated opening of 40 new stores (bank
branches) in the next 18-24 months. BankAtlantic also announced its
plans to open at least four new full service stores in the greater
Orlando area in 2007. The first two stores are expected to open during
the first quarter, and its total expansion plan currently calls for
opening more than 20 stores in the greater Orlando area over the next
several years.
* Ryan Beck was selected to act as selling agent in connection with the
subscription offering of People's Mutual Holdings' and People's Bank's
previously announced second step mutual conversion, according to a
registration statement filed by People's Bank's proposed holding
company, People's United Financial, Inc. on November 3, 2006. In
addition, Ryan Beck will act as joint lead manager for the syndicated
offering.
Levitt Corporation:
* Total revenue from sales of real estate in the homebuilding division for
the third quarter of 2006 increased 10.8% to $122.6 million, up from
$110.7 million earned in the corresponding 2005 period. During the third
quarter of 2006, deliveries declined to 403 units versus 439 units
delivered in the comparable 2005 quarter.
* Net new orders decreased 19.3% to 196 units in the third quarter of 2006
from 243 units in the comparable 2005 period, mirroring the sales trends
recently reported by several other public home builders, while the
cancellation rate (defined as cancellations divided by gross sales)
increased to 36% from 21% in the third quarter 2005. Demand in Levitt's
active adult communities, which constitute 67% of its unsold lot
inventory, experienced continued softness in Florida as buyers appeared
to remain concerned about their ability to sell their existing homes;
however, sales at its projects in Atlanta and Myrtle Beach continue to
meet expectations. Average selling prices for new orders in the third
quarter of 2006 were $347,000, up from $340,000 in the comparable 2005
period.
* While homebuilding backlog was 6.5% lower at the end of the September
2006 quarter with 1,592 homes in backlog versus the similar 2005 period
with 1,703 homes in backlog, higher selling prices yielded a 12.1%
increase in backlog value to $554.6 million versus $494.8 million in the
third quarter of 2005. The average sales price of the homes in backlog
for this quarter increased 19.6% to $348,000, up from $291,000 in the
third quarter of 2005.
* Levitt's margin percentage (defined as sales of real estate, minus cost
of sales of real estate, divided by sales of real estate) was 19.2% for
the third quarter of 2006, versus 21.2% in the comparable 2005 quarter
and 20.5% in the second quarter of 2006. SG&A as a percent of total
homebuilding revenues were approximately 17.3% in the quarter, versus
12.3% in the third quarter of 2005. The increase reflected the effect of
added compensation expense associated with higher average headcount and
recruitment costs, advertising and costs associated with new communities
that are not expected to generate revenue until 2007. Further, Levitt
recorded a charge of $900,000 in the third quarter in connection with an
approximate 11% reduction in workforce in July 2006, and other
retirement costs and retention programs. Annual cash savings from the
July workforce reduction are anticipated to total approximately $4.2
million.
* Revenue from land sales in the land division was $8.3 million for the
third quarter compared to $17.9 million during the same 2005 period.
During the quarter, 29 acres were sold with a margin of 42.7%. Total
SG&A increased to $4.3 million during the quarter from $2.4 million for
the same 2005 period. This increase reflects an additional headcount in
support of new commercial development operations and at the
Tradition(TM) South Carolina project, higher advertising and marketing
costs, and an increase in property taxes. The backlog in Levitt's land
division at September 30, 2006 consisted of contracts for the sale of 69
acres at Tradition(TM) Florida with a sales value of $20.3 million.
* The Torrey Pines Institute for Molecular Studies (TPIMS) announced its
intention to establish its Florida headquarters in Tradition Florida in
Port St. Lucie, creating nearly 190 high-paying jobs over time and
further cementing Florida's Treasure Coast as a destination for biotech
industry. TPIMS will be the first major tenant in Tradition's planned
employment corridor.
* In October, Levitt and Sons® opened Seasons at Seven Hills, a 730-home
active adult community in the Atlanta region within the Cousins
Properties' multi-generational Seven Hills community.
* Bluegreen Corporation, approximately 31% of which is owned by Levitt
Corporation, announced sales of $172.5 million and net income of $21.9
million for the 2006 third quarter, versus sales and net income for the
2005 third quarter of $166.7 million and $18.3 million, respectively.
Effective January 1, 2006, Bluegreen was required to adopt the American
Institute of Certified Public Accountants' Statement of Position 04-2,
"Accounting for Real Estate Time-Sharing Transactions (the "SOP"), which
changed the rules for many aspects of timeshare accounting, including
revenue recognition, inventory costing and incidental operations. As
previously announced by Bluegreen, the adoption of the new accounting
regulations adversely impacted Bluegreen's results by changing many
aspects of timeshare accounting, including revenue recognition,
inventory costing and accounting for incidental operations. As a result
of this accounting change, recognition of a portion of Bluegreen's sales
and profits from its Resorts division was shifted from the first half of
2006 until the second half of the year. Bluegreen's results for its
third quarter reflect the impact of this anticipated shift. Bluegreen's
management continues to believe that its business and markets remain
fundamentally strong and are demonstrating solid growth. On a pro forma,
non-GAAP basis excluding the impact of the SOP, total sales and net
income in the third quarter of 2006 were $217.2 million and $19.5
million, respectively, versus the comparable 2005 period's sales and net
income of $204.2 million and $18.3 million, respectively.
Benihana, Inc.:
* Benihana Inc. reported a 9.8% increase in company-wide comparable
restaurant sales for fiscal year 2007 second quarter ended October 8,
2006. Comparable restaurant sales for the Benihana teppanyaki
restaurants increased 9.3%, while comparable restaurant sales rose 12.8%
at RA Sushi and 10.3% at Haru, with eight and seven restaurants,
respectively in their comparable restaurant base.
* Total restaurant sales increased 7.9% to $58.6 million from $54.3
million during the same quarter last year. During the second quarter
ended October 8, 2006, Benihana teppanyaki restaurants represented
approximately 74% of consolidated restaurant sales while RA Sushi and
Haru accounted for 14% and 12% of consolidated restaurant sales,
respectively. The year-ago period included approximately $0.5 million in
revenue from the Sushi Doraku restaurant concept, which was sold in
April 2006. Restaurant sales were negatively impacted by approximately
$2.5 million, net during the second quarter of fiscal 2007 because of
temporary closures under the Company's renovation program. There were a
total of 840 store-operating weeks during the current second fiscal
quarter compared with 855 store-operating weeks during last year's
second fiscal quarter.
* Benihana continues to grow its Japanese-themed restaurant concepts with
its 77 restaurants nationwide, including 59 Benihana teppanyaki
restaurants, seven Haru sushi restaurants and eleven RA Sushi Bar
restaurants. In addition, a total of 17 franchised Benihana teppanyaki
restaurants are now open in the U.S. and Latin America.
* BFC's purchases in 2004 and 2005 of an aggregate of 800,000 shares of
Benihana Convertible Preferred Stock represents an investment by BFC of
$20 million which, based on NASDAQ closing stock price as of September
29, 2006 was convertible into $30.5 million of Benihana Common Stock.
The underlying closing price of the common stock will, of course,
fluctuate from time to time. Our holdings in Benihana upon conversion
would represent approximately 25% of Benihana's voting common stock and
10% of Benihana's outstanding equity interest.
***********************************
On June 22, 2006, BFC announced that its Class A common stock began trading on the NYSE Arca exchange ("NYSE
Arca") under the symbol "BFF." BFC's Class A Common Stock had previously traded on the NASDAQ National
Market since April 2003.
On October 27, 2006, BFC announced that its Board of Directors had approved the repurchase, through a share repurchase
program, of up to 1,750,000 shares of its Class A Common Stock, which constitutes approximately 5 percent of its
total common stock presently outstanding, at an aggregate cost of no more than $10 million.
Results by Segment:
The following table shows net income (loss) for each segment and earnings
(loss) per share including the items discussed above for the three months and
nine months ended September 30, 2006 and 2005 (in thousands, except per share
data):
Three Months Ended Nine Months Ended
2006 2005 2006 2005
BFC Activities $ (2,170) $ (3,133) $ (5,489) $(11,316)
Financial Services 2,338 16,260 17,172 60,675
Homebuilding & Real
Estate Development 2,972 10,708 1,575 46,578
Eliminations - (97) - (796)
3,140 23,738 13,258 95,141
Non-controlling interest 4,308 21,589 14,764 85,663
(Loss) income from continuing
operations (1,168) 2,149 (1,506) 9,478
Discontinued operations, less
income taxes - (92) - (290)
Net (loss) income (1,168) 2,057 (1,506) 9,188
5% Preferred Stock dividends 187 187 562 562
Net (loss) income allocable to
common stock $ (1,355) $ 1,870 $ (2,068) $ 8,626
Basic (loss) earnings per
share from continuing
operations $ (0.04) $ 0.06 $ (0.06) $ 0.32
Basic (loss) earnings per
share from discontinued
operations $ - $ - $ - $ (0.01)
Basic earnings (loss) per
share $ (0.04) $ 0.06 $ (0.06) $ 0.31
Diluted (loss) per share from
continuing operations $ (0.04) $ 0.05 $ (0.06) $ 0.28
Diluted (loss) per share from
discontinued operations $ - $ - $ - $ (0.01)
Diluted (loss) earnings per
share $ (0.04) $ 0.05 $ (0.06) $ 0.27
Basic weighted average number
of common shares outstanding 33,427 31,751 33,181 27,983
Diluted weighted average
number of common and common
equivalent shares outstanding 33,427 34,121 33,181 30,471
* The "BFC Activities" segment includes BFC's real estate owned, loans
receivable that relate to previously owned properties, its investment in
Benihana Convertible Preferred Stock and other securities and
investments, including the operations of its wholly-owned subsidiary
Cypress Creek Capital, BFC's overhead and interest expense and the
financial results of a venture partnership that BFC controls. Since BFC
is a holding company whose principal activities consist of managing
investments and seeking and evaluating potential new investments, BFC
itself has no significant direct revenue or cash-generating operations.
Accordingly, the "BFC Activities" segment will generally reflect a loss
as the current amount of dividends, interest and fees from investments
do not currently cover BFC parent company operating costs.
* The "Financial Services" segment includes BankAtlantic Bancorp and its
subsidiaries, BankAtlantic and Ryan Beck Holdings, Inc.
* The "Homebuilding & Real Estate Development" segment includes Levitt
Corporation and its subsidiaries, Levitt and Sons® and Core
Communities, and Levitt's investment in Bluegreen Corporation.
* "Noncontrolling Interest" represents that portion of a consolidated
entity that is owned by others. Both BankAtlantic Bancorp and Levitt
Corporation are consolidated in BFC's financial statements because of
BFC's voting control ownership position in each of those companies, even
though BFC's equity ownership is less than a majority in each entity. At
September 30, 2006, BFC owned 21.6% of the economic interest and held
54.9% of the voting control of BankAtlantic Bancorp and 16.6% of the
economic interest and 52.9% of the voting control of Levitt Corporation.
Shareholders' Equity or Book Value:
Shareholders' equity or book value decreased from $183 million as of December 31, 2005 to $177 million as of September
30, 2006. This decrease was primarily due to the retirement of Common Stock relating to the exercise of stock options,
the net loss for the nine months ended September 30, 2006, the effects of subsidiaries' capital transactions and
cash dividends on the 5% Cumulative Convertible Preferred Stock partially offset by the retirement of common stock
received as consideration for the exercise price and minimum withholding tax amounts upon the exercise of options.
Market Value of BankAtlantic Bancorp and Levitt Corporation:
BFC's holdings include 13.2 million shares of common stock of BankAtlantic Bancorp and 3.3 million shares of common
stock of Levitt Corporation. The market value of BFC's holdings in these two companies, based upon NYSE closing
prices, which will fluctuate from time to time, was $227 million at September 29, 2006. BFC also owns 800,000 shares
of Convertible Preferred Stock in Benihana, Inc., which is convertible into approximately 1.1 million shares of
Common Stock. Based on the closing price of Benihana, BFC's investment, if converted, was worth approximately $31
million as of September 29, 2006.
Other:
BFC's quarterly report on Form 10-Q for the quarter ended September 30, 2006 contains additional information and
was filed with the Securities and Exchange Commission on November 9, 2006. The Form 10-Q for the quarter ended
September 30, 2006 will be posted on BFC's website, which can be accessed via www.BFCFinancial.com.
About BFC Financial Corporation:
BFC Financial Corporation (NYSE Arca: BFF) is a diversified holding company that invests in and acquires private
and public companies in different industries. BFC is typically a long-term, "buy and hold" investor whose
direct and indirect, diverse ownership interests span a variety of business sectors, including consumer and commercial
banking; brokerage and investment banking services; homebuilding; development of master-planned communities; the
hospitality and leisure sector through the development, marketing and sales of vacation resorts on a time-share,
vacation club model; the restaurant and family dining business, and real estate investment banking and investment
services. BFC's current holdings include BankAtlantic Bancorp and its subsidiaries, BankAtlantic and Ryan Beck
Holdings, Inc.; Levitt Corporation, which includes its subsidiaries Levitt and Sons®, Core Communities and
its 31% ownership in Bluegreen Corporation; a minority interest in the renowned national restaurant chain, Benihana,
Inc., and Cypress Creek Capital, a wholly-owned subsidiary.
For further information, please visit our website at: www.BFCFinancial.com. To receive future news releases or
announcements directly via Email, please click on the Email Broadcast Sign Up button.
BFC Contact Info:
Investor and Corporate Communications:
Sharon Lyn, Vice President
Email: CorpComm@BFCFinancial.com
Investor Relations:
Leo Hinkley, Senior Vice President
Email: InvestorRelations@BFCFinancial.com
Mailing Address and Telephone:
BFC Financial Corporation
Attn: Investor Relations
2100 West Cypress Creek Road
Fort Lauderdale, FL 33309
Phone: (954) 940-4994
Fax: (954) 940-5320
Matters discussed in this press release may contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Actual results, performance or achievements could differ materially from
those contemplated, expressed or implied by the forward-looking statements contained herein. Past performance is
no indication of current or future results. These forward-looking statements are based largely on the expectations
of BFC and are subject to a number of risks and uncertainties that are subject to change based on factors which
are, in many instances, beyond the Company's control including the risks and uncertainties with respect to its
current investments and any future investments, that resources may not be available to make desired investments
or acquisitions; that the performance of the Company and its portfolio companies are subject to general economic
conditions and the condition of their individual industries; that expansion, strategic plans and initiatives pursued
by its portfolio companies may not be successful, and those disclosed in the Company's filings with the Securities
and Exchange Commission. Moreover, this press release contains only summary and partial financial data for the
periods in question. More complete information is contained in our 2005 Annual Report on Form 10-K and BFC's quarterly
reports on Form 10-Q filed with the Securities and Exchange Commission and available on BFC's website at http://www.BFCFinancial.com.
Additional information relating to BFC's publicly-traded portfolio companies, including the risks and uncertainties
relating to their respective businesses, is contained in reports filed by those companies with the Securities and
Exchange Commission at www.sec.gov.
Source: BFC Financial Corporation