Press Release
February 13, 2001
BOCA RATON, FL -- Bluegreen Corporation (NYSE: BXG), a leading U.S. developer and marketer of timeshare resorts,
golf communities and residential land, yesterday announced financial results for the fiscal 2001 third quarter
and nine months ended December 31, 2000 (see attached tables). The Company also announced that it has implemented
a strategic business plan to improve operating efficiencies, enhance profitability and maximize the Company's return
on assets.
Timeshare sales for the fiscal 2001 third quarter increased 16% to $27.9 million from $24.0 million for the same
period last year, and represented 62.2% of total sales. Timeshare sales for the first nine months of fiscal 2001
rose 14.8% to $105.8 million from $92.2 million for the first nine months of fiscal 2000. Timeshare sales for the
fiscal 2001 nine month period accounted for 61.6% of the Company's total sales as compared to 53.1% for the same
period last year. Higher timeshare sales for the three and nine month periods of fiscal 2001 were due to the continued
success of the points-based Bluegreen Vacation Club and overall price increases.
Lot sales for the fiscal 2001 third quarter were $16.9 million versus $21.2 million for the same period last year.
For the nine-month period of fiscal 2001, lot sales were $66.0 million as compared to $81.4 million for the first
nine months of fiscal 2000. Lower lot sales for the third quarter of fiscal 2001 reflect $3.9 million in fewer
sales due to the impact of percentage-of-completion accounting. Lower sales year-to-date are primarily due to the
inclusion in fiscal 2000 sales of approximately $5.0 million from the one-time, bulk sale of land and mineral rights,
the percentage-of-completion accounting referred to above and an additional week of operations during fiscal 2000
that generated $4.6 million of lot sales.
Higher timeshare sales, as well as increased interest income, gain on sale of notes receivable and other resort
and golf operations revenue resulted in total operating revenues for the fiscal 2001 third quarter of $57.5 million,
an increase of 4.2% from $55.2 million in the same period one year ago. For the first nine months of fiscal 2001,
total operating revenues increased 3.1% to $210.0 million, up from $203.7 million for the comparable period of
the prior year.
Lower lot sales and increased selling, general and administrative expenses contributed to Bluegreen reporting a
net loss for the third quarter of fiscal 2001 of $1.4 million, or $(.06) per share, versus a net loss of $784,000,
or $(.03) per share, for the same period one year ago. The Company has, however, remained profitable on a year-to-date
basis, reporting net income of $3.7 million, or $.15 per share, versus net income of $9.5 million, or $.37 per
share, for the same period one year ago.
George Donovan, President and Chief Executive Officer of Bluegreen, commented, ``While we are disappointed with
our third quarter financial results, we remain encouraged by Bluegreen's future prospects in the timeshare, golf
community and residential land markets. The continued sales growth of our timeshare properties reflects their high
quality, the success of our internal sales and marketing efforts and robust consumer demand. It is also important
to highlight that the cost of producing the vacation accommodations related to these higher timeshare sales decreased
as a percentage of sales during the fiscal 2001 third quarter to 22.2% from 23.8% in the third quarter of fiscal
2000. Also of note is the recent sell-out of our Orlando's Sunshine II timeshare resort just 14 months after its
completion - a Company record - and the commencement of sales at the Company's 51%-owned, wilderness-themed resort
adjacent to the world famous Big Cedar Lodge at Table Rock Lake, MO. On the land side, the third quarter included
sales generated by the grand opening of The Preserve at Jordan Lake, our exciting new Bluegreen Golf Community
near Chapel Hill, NC. This 516-lot residential community will surround an 18-hole golf course designed by the legendary
Davis Love III. Third quarter sales at The Preserve at Jordan Lake totaled $1.9 million, the majority of which
were deferred due to percentage-of-completion accounting.
Mr. Donovan also stated that certain aspects of the Company's strategic business plan have already been implemented,
including the opening of centralized resort telemarketing operations near the Company's headquarters and the centralization
of sales management under a national director of sales. Additional actions, which will include the centralization
of most resort marketing operations at the Company's headquarters, the continued centralization of the Company's
telemarketing operations in South Florida, the implementation of a centralized resort marketing database, a new
profit-based compensation structure for resorts sales and marketing management and a Company-wide initiative to
reduce costs and increase efficiency in all areas, are expected throughout the balance of calendar 2001. The Company
anticipates that these actions will help the Company deal with an issue that has impacted all timeshare developers
- growing marketing costs. The Company believes that by better controlling the efficiency and effectiveness of
its resort marketing, it should achieve improved profitability during fiscal 2002 (ending March 2002). The Company
does not anticipate incurring any material charges in connection with the implementation of this plan.
Mr. Donovan continued, ``We believe that the decisive action taken by the Company's management and Board of Directors
in adopting this plan will result in a stronger, more successful and more profitable company that is better equipped
to address the opportunities of an evolving and increasingly competitive market. The issues addressed under this
business plan represent a philosophical change in the way that Bluegreen will conduct its business going forward.
We are committed to making this a process of continuous improvement.''
He concluded, ``In just 6 years, Bluegreen has established itself as one of the industry's top 10 owners and operators
of timeshare resorts. Our award-winning residential land and golf communities are recognized as among the finest
in the industry. Throughout this period of growth, we have also maintained a dedication to prudent fiscal management,
as evidenced by a book value at December 31, 2000 of $5.69 per share and a debt-to-equity ratio of approximately
1.61:1. During fiscal 2001 we have signed a new, $90 million non-recourse timeshare receivables purchase facility,
renewed our $10 million unsecured line of credit with First Union National Bank until December 31, 2001, and extended
and increased the amount of our land receivables and inventory financing facility with Foothill Capital Corporation
to $30 million through December 31, 2005. As of December 31, 2000, we had approximately $73.8 million available
under existing credit facilities, subject to customary conditions and available collateral. We will approach the
creation of a new, improved Bluegreen with the same resolve as we have had in building our business and industry
reputation; at the same time, we will maintain our commitment to our customers and shareholders.''
Bluegreen is one of the leading companies engaged in the acquisition, development, marketing and sale of timeshare
resorts, golf communities and residential land. The Company's timeshare resorts are located in a variety of popular
vacation destinations including Orlando, Florida; the Smoky Mountains of Tennessee; Myrtle Beach, South Carolina;
Charleston, South Carolina; Branson, Missouri; Wisconsin Dells, Wisconsin; Gordonsville, Virginia; and Aruba, while
its land operations 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 made by George Donovan and any other statements contained herein that are not statements of historical
fact may be deemed forward-looking statements. The words ``believe,'' ``expect,'' ``intend,'' ``anticipate,'' ``project,''
``may,'' ``should,'' ``estimate,'' ``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, industry trends and actual results 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 include, but are not limited to, regulatory changes, changes in
national or regional economic conditions that can affect the real estate market, risks associated with a large
investment in real estate, shortages of available inventory, the risk that future sales contemplated under the
timeshare purchase facility referred to above will not close, that the Company will not be able to borrow under
credit facilities or have sufficient outstanding sources of financing to satisfy its needs, the strategic business
plan referred to in this release will not be successfully implemented and other risks detailed from time to time
in the Company's filings with the Securities and Exchange Commission, including its most recent annual report on
Form 10-K and its Form 10-Q to be filed on or about February 14, 2001. Given these risks and uncertainties, investors
are cautioned not to place undue reliance on such forward-looking statements and no assurances can be given that
such statements will be achieved.
BLUEGREEN CORPORATION
Condensed Consolidated Statements of Operations
(In 000's, Except Per Share Data)
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
December 31, January 2, December 31, January 2,
2000 2000 2000 2000
---- ---- ---- ----
REVENUES:
Timeshare sales $ 27,877 $ 24,043 $ 105,847 $ 92,237
Lot sales 16,926 21,205 65,973 81,376
----------- ----------- ----------- -----------
Total sales 44,803 45,248 171,820 173,613
Other resort and golf
operations revenue 6,204 5,203 21,780 16,243
Interest income 3,959 3,902 13,534 11,794
Gain on sale of
notes receivable 2,266 693 2,266 1,577
Other income 314 199 626 486
----------- ----------- ----------- -----------
Total operating
revenues 57,546 55,245 210,026 203,713
----------- ----------- ----------- -----------
EXPENSES:
Cost of sales:
Timeshare cost
of sales 6,197 5,724 23,485 21,638
Lot cost of sales 9,853 11,577 35,344 38,485
----------- ----------- ----------- -----------
Total cost of sales 16,050 17,301 58,829 60,123
Cost of other resort
and golf operations 6,280 5,367 19,494 15,894
Selling, general and
administrative
expense 32,712 29,723 112,229 99,214
Interest expense 4,000 3,530 11,265 10,160
Provision for
loan losses 900 1,056 3,391 3,380
----------- ----------- ----------- -----------
Total operating
expenses 59,942 56,977 205,208 188,771
----------- ----------- ----------- -----------
(Loss) income
before taxes (2,396) (1,732) 4,818 14,942
(Benefit) provision for
income taxes (922) (676) 1,855 5,827
Minority interest in (loss)
of consolidated
subsidiary (113) (272) (689) (387)
------------ ----------- ------------ -----------
Net (loss) income $ (1,361)$ (784) $ 3,652 $ 9,502
=========== =========== =========== ===========
Net (loss) income
per share:
Basic $ (0.06) $ (0.03) $ 0.15 $ 0.41
========== =========== =========== ===========
Diluted $ (0.06) $ (0.03) $ 0.15 $ 0.37
========== ========== =========== ===========
Weighted average number
of common and
common equivalent shares:
Basic 24,193 22,924 24,259 23,188
=========== =========== =========== ===========
Diluted 24,193 22,924 25,872 29,509
=========== =========== =========== ===========
BLUEGREEN CORPORATION
Condensed Consolidated Balance Sheets
(in 000's)
December 31, April 2,
2000 2000
------ ----
(Unaudited)
ASSETS
Cash and cash equivalents $ 42,067 $ 65,526
Contracts receivable, net 13,146 7,919
Notes receivable, net 73,886 70,114
Prepaid expenses 13,472 5,003
Inventory, net 192,127 197,093
Investments in securities 20,341 15,330
Property and equipment, net 41,357 35,409
Other assets 18,218 17,589
-------------- --------------
Total assets $ 414,614 $ 413,983
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable, accrued
liabilities and other $ 32,877 $ 35,168
Deferred income 4,365 2,928
Deferred income taxes 15,290 13,173
Lines-of-credit and notes payable 71,111 77,531
10.50% senior secured notes payable 110,000 110,000
8.00% convertible subordinated
notes payable 6,000 6,000
8.25% convertible subordinated
debentures 34,371 34,371
-------------- --------------
Total liabilities 274,014 279,171
Minority interest 3,023 768
Total shareholders' equity 137,577 134,044
-------------- --------------
Total liabilities and
shareholders' equity $ 414,614 $ 413,983
============== ==============
--------------------------------------------
Contact:
Bluegreen Corporation
John Chiste
Chief Financial Officer
561/912-8010
john.chiste@bxgcorp.com
or
INVESTOR RELATIONS COUNSEL:
The Equity Group Inc.
www.theequitygroup.com
Devin Sullivan, 212/836-9608