Bluegreen Vacations Holding Corporation (NYSE: BVH) (OTCQX:
BVHBB) (the “Company" or “Bluegreen”) reported today its financial
results for the quarter ended June 30, 2023.
Key Highlights as of and for the
Quarter Ended June 30, 2023:
- Net income attributable to shareholders increased 23% to $21.9
million from $17.8 million in the prior year quarter.
- Diluted Earnings Per Share (“EPS”) increased 54% to $1.34 from
$0.87 in the prior year quarter.
- Total revenue increased 11% to $260.6 million from $235.6
million in the prior year quarter.
- System-wide sales of vacation ownership interests (“VOIs”)
increased 1% to $200.7 million from $198.5 million in the prior
year quarter.(1)
- Number of guest tours increased 1% to 66,916 from 66,376 in the
prior year quarter.
- Vacation packages sold increased 17% to 47,114 compared to
40,395 in the prior year quarter.
- Vacation packages outstanding of 166,686 as of June 30, 2023,
compared to 165,240 as of December 31, 2022 and 184,782 outstanding
as of June 30, 2022.
- Adjusted EBITDA attributable to shareholders increased 17% to
$40.7 million from $34.7 million in the prior year quarter.
(2)
- In April 2023, Bluegreen/Big Cedar Vacations LLC, a joint
venture between the Company and Bass Pro Shops, acquired Branson
Cedars Resort, an 80-acre property adjacent to the joint venture’s
Wilderness Club at Big Cedar Resort.
- In May 2023, Bluegreen acquired an existing property in
Nashville, Tennessee, to be converted into a 15-story timeshare
resort.
- In June 2023, Bluegreen completed a private offering and sale
of approximately $214.6 million of VOI receivable-backed
notes.
Key Highlights as of and for the Six
Months Ended June 30, 2023:
- Net income attributable to shareholders decreased 1% to $33.4
million from $33.8 million in the prior year period.
- Diluted Earnings Per Share (“EPS”) increased 26% to $2.05 from
$1.63 in the prior year period.
- Total revenue increased 11% to $479.7 million from $430.6
million in the prior year period.
- System-wide sales of vacation ownership interests (“VOIs”)
increased 5% to $367.7 million from $350.1 million in the prior
year period.(1)
- Number of guest tours increased 3% to 118,671 from 115,237 in
the prior year period.
- Vacation packages sold increased 7% to 87,894 compared to
82,385 in the prior year period.
- Adjusted EBITDA attributable to shareholders increased 8% to
$70.8 million from $65.7 million in the prior year period.(2)
- Free cash flow was an outflow of $58.5 million in the six
months ended June 30, 2023, compared to an inflow of $61.1 million
for the six months ended June 30, 2022, primarily as a result of
the acquisition and development of real estate, an increase in VOI
notes receivable originations and timing of changes in working
capital.(3)
(1)
See appendix for reconciliation of
system-wides sales of VOIs to gross sales of VOIs for each
respective period.
(2)
See appendix for reconciliation of
Adjusted EBITDA attributable to shareholders to net income
attributable to shareholders for each respective period.
(3)
See appendix for reconciliation of free
cash flow to net cash provided by operating activities.
Alan B. Levan, Chairman and Chief Executive Officer of Bluegreen
Vacations Holding Corporation, commented, “We continue to be
excited by our overall performance, which drove a 17% increase in
Adjusted EBITDA in the second quarter of 2023. We believe that the
results in the second quarter reflect our dual focus on achieving
growth while at the same time improving our profit margin. Not only
did we achieve a second quarter record $200.7 million of
system-wide sales, but we achieved this while also reducing our
selling and marketing costs to 53% of system-wide sales in the
second quarter of 2023 compared to 57% in the second quarter of
2022. Our focus on improving the efficiency of our vacation package
marketing programs drove marketing costs down, while also producing
a 17% increase in vacation package sales in the second quarter of
2023 compared to the second quarter of 2022. In addition, we
realized lower sales commission expense as a percentage of
system-wide sales during the 2023 quarter compared to the 2022
quarter.”
“Our system-wide sales were 1% higher in the second quarter of
2023 as compared to the second quarter of 2022. This increase
reflected the impact of a 1% increase in guest tours over the prior
year quarter, at a consistent sales volume per guest of
approximately $3,013. Had it not been for the out of service units
in certain Florida properties because of hurricanes in 2022, we
believe we would have achieved greater efficiencies and sales of
VOIs and we expect to continue to increase efficiency as more of
these units are returned to our system in the coming months. We
continue to improve our average sales price per transaction, which
increased 4% to $21,456 during the 2023 quarter compared to the
2022 quarter.”
“Our sales of VOIs are driven by the success of our marketing
programs, and Bluegreen’s marketing to new customers generally
begins with the sale of a vacation package to a prospect. During
the second quarter of 2023, we sold 47,114 vacation packages, a 17%
increase from the 40,395 we sold in the second quarter of 2022.
This increase was despite closing or going ‘virtual’ at 52
marketing locations on January 1, 2023. During the second quarter,
we reopened four of these locations and are pleased with the early
results.”
“We continue to see high demand for leisure travel and
specifically for the Bluegreen Vacation Club, and we are pursuing a
strategy to expand the offerings of vacation experiences for our
owners in some of the most desirable locations in the country. In
April 2023, Bluegreen/Big Cedar Vacations LLC, our joint venture
with Bass Pro Shops, acquired the Branson Cedars Resort in Branson,
Missouri, an 80-acre property with existing “tiny home” cottages,
cabins, treehouses, and resort amenities, and with future
development planned. In May 2023, we acquired a 15-story hotel in
the historic Printers Alley district of Nashville, Tennessee. These
acquisitions are the latest new properties added by Bluegreen in
the last year, in addition to adding Presidential Suites and other
units at certain of our existing resorts. While we expect that
these expansion initiatives will in the future produce higher
revenues and earnings, in the short-term the increased inventory
carrying costs and start-up costs put pressure on our operating
margin, as well as involve increased or higher acquisition and
development expenditures which adversely impacted our free cash
flow during 2023 to date.”
“Our strategy of increasing our note receivable portfolio from
financed sales of VOIs is also contributing to Adjusted EBITDA. Net
interest spread, which is the excess of interest income from VOI
notes receivable over the interest expense from pledging and
selling those VOI notes receivable in the capital markets,
increased 11% to $21.5 million in the second quarter of 2023 from
$19.3 million in the second quarter of 2022.”
“We were also pleased that our Adjusted EBITDA at Resort
Management and Club Operations increased by 11% in the second
quarter of 2023, to a record $23.1 million from $20.9 million in
the second quarter of 2022. We believe that the results of this
segment are important to our continued goal of generating recurring
free cash flow and earnings.”
“We believe that, from a balance sheet perspective, we are well
positioned to navigate uncertain economic conditions by virtue of
our approximately $178.7 million of unrestricted cash on hand and
$500.4 million of conditional availability under our lines of
credit and receivable purchase facilities as of June 30, 2023. We
also believe we have a level of protection from rising interest
rates as 54% of our outstanding debt at June 30, 2023 bear interest
rates that are currently fixed. We were pleased to complete a
private offering and sale of $214.6 million of VOI
receivable-backed notes in June 2023, which we believe evidences
our continued ability to raise capital in the securitization
markets. Our plan is to maintain what we believe to be a healthy
balance sheet, while continuing our focus on growth and
profitability over the long term.” Mr. Levan concluded.
Financial
Results
(dollars in millions, except per guest and
per transaction amounts)
Three Months Ended
June 30,
Six Months
Ended June 30,
2023
2022
Q2 2023 vs
Q2 2022
% Change
2023
2022
YTD 2023 vs
YTD 2022
% Change
Total revenue
$
260.6
$
235.6
11
%
$
479.7
$
430.6
11
%
Income before non-controlling interest and
provision for income taxes
$
34.5
$
28.0
23
%
$
54.4
$
53.4
2
%
Adjusted EBITDA Attributable to
shareholders (1)
$
40.7
$
34.7
17
%
$
70.8
$
65.7
8
%
(1)
See Appendix for reconciliation of
Bluegreen’s Adjusted EBITDA Attributable to shareholders to Net
Income Attributable to shareholders.
Adjusted EBITDA Attributable to Shareholders was $40.7 million
for the quarter ended June 30, 2023, including $41.4 million
generated by the Sales of VOIs and Financing Segment and $23.1
million produced by the Resort Operations and Club Management
segment, partially offset by $19.2 million of corporate overhead
and other expenses and $4.6 million of Adjusted EBITDA attributable
to a third-party non-controlling interest in Bluegreen/Big Cedar
Vacations LLC. Please see the discussion of Segment Results below
for further information.
Adjusted EBITDA Attributable to Shareholders was $70.8 million
for the six months ended June 30, 2023, including $76.1 million
generated by the Sales of VOIs and Financing Segment and $45.7
million produced by the Resort Operations and Club Management
segment, partially offset by $42.4 million of corporate overhead
and other expenses and $8.6 million of Adjusted EBITDA attributable
to a third-party non-controlling interest in Bluegreen/Big Cedar
Vacations LLC. Please see the discussion of Segment Results below
for further information.
Sales of VOIs and Financing
Segment
(dollars in millions, except per guest and
per transaction amounts)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
Q2 2023 vs
Q2 2022
% Change
2023
2022
YTD 2023 vs
YTD 2022
% Change
System-wide sales of VOIs
$
200.7
$
198.5
1
%
$
367.7
$
350.1
5
%
Segment adjusted EBITDA
$
41.4
$
37.4
11
%
$
76.1
$
73.1
4
%
Provision for loan losses
16.3%
15.5%
80
bp
16.6%
15.1%
150
bp
Cost of VOIs sold
11.6%
12.6%
(100)
bp
11.9%
12.4%
(50)
bp
Financing revenue, net of financing
expense
$
21.5
$
19.3
11
%
$
42.6
$
38.0
12
%
Key Data Regarding
Bluegreen’s System-wide sales of VOIs
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
Q2 2023 vs
Q2 2022
% Change
2023
2022
YTD 2023 vs
YTD 2022
% Change
System-wide sales of VOIs
$
200.7
$
198.5
1
%
$
367.7
$
350.1
5
%
Number of total guest tours
66,916
66,376
1
%
118,671
115,237
3
%
Average sales price per transaction
$
21,456
$
20,552
4
%
$
21,661
$
20,410
6
%
Sales to tour conversion ratio
14.0%
14.7%
(70)
bp
14.3%
15.0%
(70)
bp
Sales volume per guest ("VPG")
$
3,013
$
3,016
—
%
$
3,105
$
3,056
2
%
Selling and marketing expenses, as a % of
system-wide sales of VOIs
53.1%
56.7%
(360)
bp
54.2%
56.1%
(190)
bp
Provision for loan losses
16.3%
15.5%
80
bp
16.6%
15.1%
150
bp
Cost of VOIs sold
11.6%
12.6%
(100)
bp
11.9%
12.4%
(50)
bp
System-wide sales of VOIs increased 1% to $200.7 million during
the three months ended June 30, 2023 from $198.5 million for the
three months ended June 30, 2022. The number of guest tours was 1%
higher in the 2023 second quarter compared to the 2022 second
quarter, while sales volume per guest, or VPG, was relatively
consistent between the quarters. The VPG performance in the second
quarter of 2023 was driven by a 4% increase in average sales price
per transaction, partially offset by a 70 basis-point decrease in
the sale-to-tour conversion rate as we continued to focus on larger
transaction sizes.
System-wide sales of VOIs increased 5% to $367.7 million during
the six months ended June 30, 2023 from $350.1 million for the six
months ended June 30, 2022. The number of guest tours was 3%
higher, while VPG was relatively flat in the six months ended June
30, 2023, as compared to the six months ended June 30, 2022. The
VPG performance in the six months ended June 30, 2023 was driven by
a 6% increase in average sales price per transaction, partially
offset by a 70 basis-point decrease in the sale-to-tour conversion
rate.
Fee-based Sales Commission
Revenue
VOI sales of third-party inventory, for which we earn a
commission, represented 10% and 11% of System-wide Sales of VOIs
during the three and six months ended June 30, 2023, respectively.
Fee-based sales commission revenue on such sales was $13.9 million
and $25.6 million during the three and six months ended June 30,
2023, respectively, which represented a commission rate of
approximately 66% and 65% during those respective periods.
VOI sales of third-party inventory, for which we earn a
commission, are expected to be between 9% and 12% of system-wide
sales of VOIs for the remainder of 2023.
Provision for Loan Losses
The provision for loan losses as a percentage of gross sales of
VOIs was approximately 16% during both the second quarter of 2023
and the second quarter of 2022. The provision for loan losses as a
percentage of gross sales of VOIs was approximately 17% during the
six months ended June 30, 2023, and 15% during the six months ended
June 30, 2022. The increase in the provision for loan losses as a
percentage of gross sales of VOIs during the first half of 2023 as
compared to the comparable prior year period is primarily a result
of a higher proportion of VOI sales that were financed by us, as we
actively seek to grow our VOI notes receivable portfolio to
generate additional interest income.
The provision for loan losses is expected to be between 16% and
18% of gross sales of VOIs during the remainder of 2023.
Cost of VOIs Sold
Cost of VOIs sold represented 12% and 13% of sales of VOIs in
the second quarters of 2023 and 2022 and 12% of sales of VOIs
during both six months ended June 30, 2023 and 2022,
respectively.
Cost of VOIs sold is expected to be between 11% and 13% of sales
of VOIs for the remainder of 2023.
Net Carrying Cost of Inventory
The net carrying cost of inventory increased 18% to $4.7 million
in the second quarter of 2023 from $4.0 million in the second
quarter of 2022. The net carrying cost of inventory increased 20%
to $9.7 million for the six months ended June 30, 2023, from $8.1
million for the six months ended June 30, 2022. The increase in net
carrying cost of inventory reflects lower rental and sampler
revenue, partially offset by lower maintenance fees and developer
subsidies based on the timing of acquisitions of VOI inventory.
Recent and planned acquisitions of VOI inventory are expected to
increase developer subsidies in the near future.
Selling and Marketing Expenses
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
Q2 2023 vs
Q2 2022
% Change
2023
2022
YTD 2023 vs
YTD 2022
% Change
Selling and marketing expenses, as a % of
system-wide sales of VOIs
53.1%
56.7%
(360)
bp
54.2%
56.1%
(190)
bp
Percentage of sales of VOIs to new
customers
44.8%
46.4%
(160)
bp
42.1%
44.9%
(280)
bp
Number of Bass Pro and Cabela's marketing
locations (1)
130
128
2
%
130
128
2
%
Number of total guest tours
66,916
66,376
1
%
118,671
115,237
3
%
Number of vacation packages sold
47,114
40,395
17
%
87,894
82,385
7
%
Number of vacation packages outstanding,
end of the period (2)
166,686
184,782
(10)
%
166,686
184,782
(10)
%
(1)
As of January 1, 2023, 23 of our Cabela’s
marketing locations were converted to unmanned, virtual kiosks, 4
of which were reopened during June 2023.
(2)
Excludes vacation packages sold to
customers more than one year prior to the period presented and
vacation packages sold to customers who had already toured and
purchased VOIs.
Selling and marketing expenses decreased 5% to $106.6 million in
the second quarter of 2023 compared to $112.6 million in the second
quarter of 2022, despite the 1% increase in system-wide sales
during the 2023 quarter compared to the 2022 quarter. As a
percentage of system-wide sales, selling and marketing expenses
decreased to 53% in the second quarter of 2023 compared to 57% in
the second quarter of 2022. The decrease in selling and marketing
expenses as a percentage of system-wide sales was driven by
decreases in our marketing costs and sales commissions expense and
a higher proportion of sales to existing owners, which are
generally more profitable than sales to new customers. Sales to new
owners increased to 55% of system-wide sales in the second quarter
of 2023 from 54% in the second quarter of 2022.
Selling and marketing expenses increased 1% to $199.1 million
for the six months ended June 30, 2023, compared to $196.5 million
for the six months ended June 30, 2022, primarily driven by the 5%
increase in system-wide sales during the 2023 period compared to
the 2022 period. As a percentage of system-wide sales, selling and
marketing expenses decreased to 54% for the six months ended June
30, 2023, compared to 56% for the six months ended June 30, 2022.
The decrease in selling and marketing expenses as a percentage of
system-wide sales was driven by decreases in our marketing cost and
sales commissions expense, both as a percentage of system-wide
sales. Sales to existing owners, which are generally more
profitable than sales to new customers, increased to 58% of
system-wide sales for the six months ended June 30, 2023, from 55%
for the six months ended June 30, 2022.
Marketing expense decreased during the 2023 periods as a result
of the previously disclosed transition of kiosks at certain
Cabela’s stores to an unmanned, virtual format and exited certain
kiosks at malls as of January 1, 2023. The operation of fewer
locations lowered overall costs and allowed us to focus on higher
producing locations. As a result, even with fewer locations, we
increased the number of vacation packages sold in the second
quarter and the first half of 2023 by 17% and 7%, respectively,
over the prior periods. The active pipeline of vacation packages
decreased to 166,686 at June 30, 2023 from 184,782 at June 30, 2022
based on vacation packages used or expired, net of new vacation
package sales. During the second, third and fourth quarters of
2022, we reorganized our retail marketing operations temporarily
reducing our package sales and pipeline of vacation packages. While
there is no assurance that this will continue to be the case,
historically, approximately 40%-42% of vacation packages resulted
in guest tours at one of Bluegreen’s resorts with a sales center
within twelve months of purchase. In addition to this active
pipeline, Bluegreen also has a pipeline of approximately 16,400
vacation packages held by customers who already toured and
purchased a VOI who have indicated they would tour again.
Selling and marketing expenses are expected to be between 53%
and 55% as a percentage of system-wide sales during the remainder
of 2023.
General & Administrative Expenses from
Sales & Marketing Operations
General and administrative expenses representing expenses
directly attributable to sales and marketing operations increased
7% to $15.0 million during the second quarter of 2023 from $14.0
million during the second quarter of 2022 and increased 11% to
$26.5 million during the six months ended June 30, 2023 from $23.9
million during the six months ended June 30, 2022. As a percentage
of system-wide sales of VOIs, general and administrative expenses
attributable to sales and marketing operations were 7% during each
such periods.
General and administrative expenses representing expenses
directly attributable to sales and marketing operations as a
percentage of sales are expected to be between 6% and 8% as a
percentage of system-wide sales for the remainder of 2023.
Financing Revenue and Financing
Expense
Interest income on VOI notes receivable increased 25% to $29.3
million in the second quarter of 2023 compared to $23.4 million in
the second quarter of 2022. Interest income on VOI notes receivable
increased 26% to $57.2 million for the six months ended June 30,
2023, compared to $45.5 million for the six months ended June 30,
2022. The increase in interest income on VOI notes receivable
reflects a higher balance of VOI notes receivable due to continued
VOI sales growth and our efforts to increase the amount of VOI
sales that we finance.
Interest expense on receivable-backed notes payable increased
90% to $7.8 million in the second quarter of 2023 compared to $4.1
million in the second quarter of 2022. Interest expense on
receivable-backed notes payable increased 95% to $14.6 million for
the six months ended June 30, 2023, compared to $7.5 million for
the six months ended June 30, 2022. The increase in interest
expense on receivable-backed notes payable reflect higher
outstanding receivable-backed notes payable and an increased
weighted-average cost of borrowing, associated with increases in
interest rates.
Resort Operations and Club Management
Segment
(dollars in millions)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
Q2 2023 vs
Q2 2022
% Change
2023
2022
YTD 2023
vs YTD
2022
% Change
Resort operations and club management
revenue
$
59.1
$
45.5
30
%
$
110.7
$
91.7
21
%
Segment Adjusted EBITDA
$
23.1
$
20.9
11
%
$
45.7
$
41.5
10
%
Resorts managed
52
49
6
%
52
49
6
%
The increases in Resort operations and club management revenue
and Adjusted EBITDA in the second quarter 2023 and the six months
ended June 30, 2023 compared to the comparable prior year periods,
primarily reflect an increase in management fees, higher reimbursed
HOA resort operating costs and three additional resort management
contracts, partially offset by higher labor costs of providing such
services.
Corporate Overhead, Administrative Expenses, Interest Expense
and Other
Corporate General and Administrative
Expenses
Corporate general and administrative expenses increased 15% to
$25.7 million during the second quarter of 2023 from $22.3 million
during the second quarter of 2022. Corporate general and
administrative expenses increased 10% to $52.4 million during the
six months ended June 30, 2023, from $47.6 million during the six
months ended June 30, 2022. The increases in expenses during the
2023 periods as compared to the 2022 periods were primarily
associated with higher legal fees, insurance costs and information
technology costs.
Interest Expense
Interest expense not related to receivable-backed debt was $10.0
million and $6.2 million during the second quarters of 2023 and
2022, respectively, and $19.6 million and $10.6 million during the
six months ended June 30, 2023 and 2022, respectively. These
increases were primarily due to an increase in outstanding debt and
a higher weighted-average cost of borrowing due to increased
interest rates in the 2023 periods.
Securitization of Vacation Ownership
Receivables
In June 2023, Bluegreen completed a private offering and sale of
approximately $214.6 million of VOI receivable-backed notes. The
transaction consisted of the issuance of three tranches of notes
(collectively, the “Notes”) with a weighted average coupon rate of
approximately 6.32% and a maturity date in November 2038. The gross
advance rate for the transaction was 85.5%. A portion of the
proceeds from the Notes sale was used to pay down one of the
Company’s receivable-backed debt facilities with the remainder of
the proceeds expected to be used primarily for general corporate
purposes.
Additional Information
For more complete and detailed information regarding the Company
and its financial results, please see the Company’s Annual Report
on Form 10-K for the year ended December 31, 2022, which was filed
with the SEC on March 13, 2023, and its Quarterly Report on Form
10- Q for the three months ended June 30, 2023, which is expected
to be filed with the SEC on or about August 2, 2023, and will be
available on the SEC's website, https://www.sec.gov, and on the
Company’s website, www.BVHCorp.com.
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.
About Bluegreen
Vacations:
Bluegreen Vacations Holding Corporation (NYSE: BVH; OTCQX:
BVHBB) is a leading vacation ownership company that markets and
sells vacation ownership interests and manages resorts in popular
leisure and urban destinations. The Bluegreen Vacation Club is a
flexible, points-based, deeded vacation ownership plan with 71 Club
and Club Associate Resorts and access to nearly 11,400 other hotels
and resorts through partnerships and exchange networks.
For further information, please visit
us at:
Bluegreen Vacations Holding Corporation: www.BVHCorp.com
Forward Looking
Statements
Certain statements in this press release are "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements, other than statements of
historical fact, are forward-looking statements. Forward-looking
statements are based on current expectations of management and can
be identified by the use of words such as “believe”, “may”,
“could”, “should”, “plans”, “anticipates”, “intends”, “estimates”,
“expects”, and other words and phrases of similar import.
Forward-looking statements involve risks, uncertainties, and other
factors, many of which are beyond our control, that may cause
actual results or performance to differ from those set forth or
implied in the forward-looking statements. These risks and
uncertainties include, without limitation, the risk that the
Company is a holding company and, accordingly, will be largely
dependent on dividends from Bluegreen to fund its expenses and
obligations in future periods, and Bluegreen’s ability to pay
dividends will depend on its results and may be limited by the
terms of Bluegreen’s indebtedness; risks relating to Bluegreen’s
business, operations, financial results, business strategy and
prospects; risks related to general economic conditions, including
increasing interest rates, inflationary trends, a potential
recession and supply chain issues, and our ability to successfully
navigate any adverse condition; competitive conditions; labor
market conditions, including costs and shortages of labor, and its
impact on Bluegreen’s operations and sales; risks related to
changes made to our vacation package programs and their impact on
sales, including that the goal of improving the efficiency of
Bluegreen’s marketing expenditures may not result in the benefits
anticipated; risks related to our investments in sales and
marketing efforts and infrastructure, including their impact on our
cash flow and the risk that they may not result in the benefits
anticipated; risks related to resort acquisitions and our pursuit
of acquisition and development opportunities, including that
acquired resorts may not open when planned, the costs and risks of
development and renovation activities, including potential
construction delays and environmental issues may be greater than
anticipated, that we may not be successful in identifying or
consummating acquisition or development opportunities in the
future, and that acquired or developed resorts may not be
successfully operated or result in the benefits anticipated; risks
relating to our liquidity and the availability of capital;, that
the Company may not realize the benefits of its securitizations to
the extent anticipated or at all, and that the Company’s receivable
loan portfolio won’t perform as anticipated; the risk that our
allowance for loan losses may not be adequate and, accordingly, may
need to be increased in the future, the risk that Bluegreen’s
default rates will increase and exceed expectations; risks related
to Bluegreen’s efforts to address the actions of timeshare exit
firms and the increase in default rates associated therewith are
not successful, or otherwise; risks related to our indebtedness,
including the potential for accelerated maturities and debt
covenant violations; the impact of public health and general
economic conditions, including inflation, on Bluegreen’s consumers,
including their income and level of discretionary spending, and on
consumer traffic at retail locations; the risk that our core
strategy of primarily offering a ‘drive-to’ network of resorts will
not continue to serve as a growth driver; the risk that resort
operations and club management segment may not continue to produce
recurring EBITDA and free cash flow; risks that Bluegreen’s current
or future marketing alliances and arrangements, including its
marketing arrangements with Bass Pro, NASCAR and the Choice Hotels
program, may not be renewed and will expire pursuant to their terms
and may not be profitable; the risk that vacation package sales,
including those in the pipeline, may not convert to tours and/or
VOI sales at anticipated or historical rates; the risk that efforts
to reactivate older vacation packages which have not been used may
not be successful; the risk that resort occupancies may not
continue at current or historical levels or meet expectations; our
ability to successfully implement strategic plans and initiatives,
generate earnings and long-term growth may not result in increased
sales, revenues or efficiencies, or otherwise be successful; risks
that construction defects, structural failures or natural disasters
at or in proximity to Bluegreen’s resort; risks related to
expansion of the resort network in existing and to new locations,
including that such expansion may not be successful and may
increase the Company’s debt and decrease the Company’s free cash
flow; risks related to the mix of sales to new customers and
existing owners, including that the level of sales to new customers
may not be maintained, or support net owner growth in the future;
risks regarding the amount of shares, if any, which may be
repurchased by the Company in the future, the benefits to the
Company, if any, of repurchasing shares, the timing of any share
repurchases, and the availability of funds for the repurchase of
shares; the risk that quarterly dividend payments may not be
declared at the current level in the future, on a regular basis as
anticipated, or at all; and the additional risks and uncertainties
described in the Company's filings with the SEC, including, without
limitation, the Company’s Annual Report on Form 10-K for the year
ended December 31, 2022 (including the “Risk Factors” section
thereof), which was filed on March 13, 2023, and the Company’s
Quarterly Report on Form 10-Q for the three months ended June 30,
2023, which is expected to be filed on August 2, 2023. The Company
cautions that the foregoing factors are not exclusive. You should
not place undue reliance on any forward-looking statement, which
speaks only as of the date made. The Company does not undertake,
and specifically disclaims any obligation, to update or supplement
any forward-looking statements. In addition, past performance may
not be indicative of future results.
BLUEGREEN VACATIONS HOLDING
CORPORATION
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
June 30,
December 31,
2023
2022
ASSETS
Cash and cash equivalents
$
178,740
$
175,683
Restricted cash ($27,027 and $19,461 in
VIEs at June 30, 2023
and December 31, 2022, respectively)
52,213
50,845
Notes receivable
842,481
763,801
Less: Allowance for loan losses
(223,894
)
(211,311
)
Notes receivable, net ($392,612 and
$354,403 in VIEs
at June 30, 2023 and December 31, 2022,
respectively)
618,587
552,490
Vacation ownership interest ("VOI")
inventory
447,963
389,864
Property and equipment, net
87,331
85,915
Intangible assets, net
61,293
61,293
Operating lease assets
20,911
22,963
Prepaid expenses
25,566
23,833
Other assets
32,979
35,499
Total assets
$
1,525,583
$
1,398,385
LIABILITIES AND EQUITY
Liabilities
Accounts payable
$
25,843
$
21,389
Deferred income
16,828
15,675
Accrued liabilities and other
118,232
110,048
Receivable-backed notes payable -
recourse
19,457
20,841
Receivable-backed notes payable -
non-recourse (in VIEs)
505,468
440,781
Note payable to BBX Capital, Inc.
35,000
50,000
Note payable and other borrowings
240,355
218,738
Junior subordinated debentures
136,591
136,011
Operating lease liabilities
25,472
27,716
Deferred income taxes
120,275
113,193
Total liabilities
1,243,521
1,154,392
Commitments and Contingencies - See Note
9
Equity
Preferred stock of $0.01 par value;
authorized 10,000,000 shares
—
—
Class A Common Stock of $0.01 par value;
authorized 30,000,000 shares;
issued and outstanding 12,204,198 in 2023
and 12,165,825 in 2022
122
122
Class B Common Stock of $0.01 par value;
authorized 4,000,000 shares;
issued and outstanding 3,664,117 in 2023
and 2022
37
37
Additional paid-in capital
49,849
46,821
Accumulated earnings
151,277
124,680
Total Bluegreen Vacations Holding
Corporation equity
201,285
171,660
Non-controlling interest
80,777
72,333
Total equity
282,062
243,993
Total liabilities and equity
$
1,525,583
$
1,398,385
BLUEGREEN VACATIONS HOLDING
CORPORATION
CONSOLIDATED STATEMENTS OF
INCOME AND COMPREHENSIVE INCOME
(In thousands, except share
data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Revenue:
Gross sales of VOIs
$
179,685
$
170,787
$
328,544
$
286,395
Provision for loan losses
(29,324
)
(26,526
)
(54,570
)
(43,105
)
Sales of VOIs
150,361
144,261
273,974
243,290
Fee-based sales commission revenue
13,881
18,850
25,572
42,934
Other fee-based services revenue
36,045
32,785
69,345
63,991
Cost reimbursements
26,300
16,168
47,669
34,232
Interest income
30,953
23,506
59,788
45,704
Other income, net
3,078
—
3,342
473
Total revenues
260,618
235,570
479,690
430,624
Costs and Expenses:
Cost of VOIs sold
17,387
18,221
32,717
30,063
Cost of other fee-based services
16,667
13,592
31,248
26,354
Cost reimbursements
26,300
16,168
47,669
34,232
Interest expense
17,741
10,356
34,210
18,114
Selling, general and administrative
expenses
148,053
149,158
279,492
268,457
Other expense, net
—
68
—
—
Total costs and expenses
226,148
207,563
425,336
377,220
Income before income taxes
34,470
28,007
54,354
53,404
Provision for income taxes
(8,019
)
(6,171
)
(12,498
)
(12,361
)
Net income
26,451
21,836
41,856
41,043
Less: Income attributable to
noncontrolling interests
4,538
4,052
8,444
7,272
Net income attributable to
shareholders
$
21,913
$
17,784
$
33,412
$
33,771
Comprehensive income attributable to
shareholders
$
21,913
$
17,784
$
33,412
$
33,771
Basic earnings per share (1)
$
1.38
$
0.88
$
2.11
$
1.65
Diluted earnings per share (1)
$
1.34
$
0.87
$
2.05
$
1.63
Basic weighted average number of common
shares outstanding
15,868
20,226
15,864
20,500
Diluted weighted average number of common
and common equivalent shares outstanding
16,310
20,389
16,278
20,678
Cash dividend declared per Class A and
B common shares
$
0.20
$
0.15
$
0.40
$
0.15
(1)
Basic and Diluted EPS are calculated the
same for both Class A and B common shares.
BLUEGREEN VACATIONS HOLDING
CORPORATION
ADJUSTED EBITDA ATTRIBUTABLE
TO SHAREHOLDERS RECONCILIATION
For the Three Months
Ended June 30,
For the Six Months
Ended June 30,
2023
2022
2023
2022
(in thousands)
Net income attributable to
shareholders
$
21,913
17,784
$
33,412
33,771
Net income attributable to the
non-controlling interest in Bluegreen/Big Cedar Vacations
4,538
4,052
8,444
7,272
Net Income
26,451
21,836
41,856
41,043
Add: Depreciation and amortization
3,867
3,852
7,839
7,773
Less: Interest income (other than interest
earned on
VOI notes receivable)
(1,677
)
(132
)
(2,550
)
(195
)
Add: Interest expense - corporate and
other
9,980
6,241
19,605
10,603
Add: Provision for income taxes
8,019
6,171
12,498
12,361
EBITDA
46,640
37,968
79,248
71,585
Add: Share-based compensation expense
1,578
817
3,037
1,562
Sale of vacant land and other assets
(2,909
)
6
(2,927
)
(38
)
Adjusted EBITDA
45,309
38,791
79,358
73,109
Adjusted EBITDA attributable to the
non-controlling interest
(4,597
)
(4,115
)
(8,560
)
(7,385
)
Adjusted EBITDA attributable to
shareholders
$
40,712
34,676
$
70,798
65,724
The Company defines EBITDA as earnings, or net income, before
taking into account income tax, interest income (excluding interest
earned on VOI notes receivable), interest expense (excluding
interest expense incurred on debt secured by VOI notes receivable),
and depreciation and amortization. The Company defines Adjusted
EBITDA as EBITDA, adjusted to exclude amounts of loss (gain) on
assets held for sale, share-based compensation expense, and items
that the Company believes are not representative of ongoing
operating results. Adjusted EBITDA Attributable to Shareholders is
Adjusted EBITDA excluding amounts attributable to the
non-controlling interest in Bluegreen/Big Cedar Vacations (in which
Bluegreen owns a 51% interest). For purposes of the calculation of
EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to
Shareholders, no adjustments were made for interest income earned
on 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 ordinary operations of the Company’s
business.
The Company considers EBITDA, Adjusted EBITDA, and Adjusted
EBITDA Attributable to Shareholders to be indicators of operating
performance, and they are used by the Company to measure its
ability to service debt, fund capital expenditures and expand its
business. EBITDA and Adjusted EBITDA are also used by companies,
lenders, investors and others because they exclude 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. 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, Adjusted EBITDA and Adjusted EBITDA Attributable
to Shareholders also exclude 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 depreciation and
amortization expense among companies.
EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to
Shareholders are not recognized terms under GAAP and should not be
considered as an alternative to net income or any other measure of
financial performance or liquidity, including cash flow, derived in
accordance with GAAP, or to any other method or analyzing results
as reported under GAAP. The limitations of using EBITDA, Adjusted
EBITDA or Adjusted EBITDA Attributable to Shareholders as an
analytical tool include, without limitation, that EBITDA, Adjusted
EBITDA and Adjusted EBITDA Attributable to Shareholders do not
reflect (i) changes in, or cash requirements for, working capital
needs; (ii) interest expense, or the cash requirements necessary to
service interest or principal payments on indebtedness (other than
as noted above); (iii) tax expense or the cash requirements to pay
taxes; (iv) historical cash expenditures or future requirements for
capital expenditures or contractual commitments; or (v) the effect
on earnings or changes resulting from matters that the Company does
not believe to be indicative of future operations or performance.
Further, although depreciation and amortization are non-cash
charges, the assets being depreciated and amortized often have to
be replaced in the future, and EBITDA, Adjusted EBITDA and Adjusted
EBITDA Attributable to Shareholders do not reflect any cash that
may be required for such replacements. In addition, the Company’s
definition of Adjusted EBITDA or Adjusted EBITDA Attributable to
Shareholders may not be comparable to definitions of Adjusted
EBITDA, Adjusted EBITDA Attributable to Shareholders or other
similarly titled measures used by other companies.
BLUEGREEN VACATIONS HOLDING
CORPORATION
SYSTEM-WIDE SALES OF VOIs
RECONCILIATION (1)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
(in thousands)
2023
2022
2023
2022
Gross sales of VOIs
$
179,685
$
170,787
$
328,544
$
286,395
Add: Fee-Based sales
21,022
27,760
39,109
63,697
System-wide sales of VOIs
$
200,707
$
198,547
$
367,653
$
350,092
(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 the
Bluegreen Vacation Club through the same selling and marketing
process Bluegreen uses to sell its VOI inventory. The Company
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.
BLUEGREEN VACATIONS HOLDING
CORPORATION
FREE CASH FLOW RECONCILIATION
(1)
For the Three Months Ended
June 30,
(in thousands)
2023
2022
Net cash provided by (used in) operating
activities
$
(49,868
)
$
68,924
Purchases of property and equipment
(8,666
)
(7,867
)
Free Cash Flow
$
(58,534
)
$
61,057
(1)
Free cash flow is a non-GAAP measure
defined as cash provided by operating activities less capital
expenditures for property and equipment. The Company focuses on the
generation of free cash flow and considers free cash flow to be a
useful supplemental measure of its 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 liquidity. The Company’s
computation of free cash flow may differ from the methodology used
by other companies. Investors are cautioned that items excluded
from free cash flow are a significant component in understanding
and assessing the Company’s financial performance.
BLUEGREEN VACATIONS HOLDING
CORPORATION
SALES OF VOIs AND FINANCING
SEGMENT- ADJUSTED EBITDA
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2023
2022
2023
2022
Amount
% of
System-
wide sales
of VOIs (5)
Amount
% of
System-
wide sales
of VOIs (5)
Amount
% of
System-
wide sales
of VOIs (5)
Amount
% of
System-
wide sales
of VOIs (5)
(in thousands)
Bluegreen owned VOI sales (1)
$
179,685
90
$
170,787
86
$
328,544
89
$
286,395
82
Fee-Based VOI sales
21,022
10
27,760
14
39,109
11
63,697
18
System-wide sales of VOIs
200,707
100
198,547
100
367,653
100
350,092
100
Less: Fee-Based sales
(21,022
)
(10)
(27,760
)
(14)
(39,109
)
(11)
(63,697
)
(18)
Gross sales of VOIs
179,685
90
170,787
86
328,544
89
286,395
82
Provision for loan losses (2)
(29,324
)
(16)
(26,526
)
(16)
(54,570
)
(17)
(43,105
)
(15)
Sales of VOIs
150,361
75
144,261
73
273,974
75
243,290
69
Cost of VOIs sold (3)
(17,387
)
(12)
(18,221
)
(13)
(32,717
)
(12)
(30,063
)
(12)
Gross profit (3)
132,974
88
126,040
87
241,257
88
213,227
88
Fee-Based sales commission revenue (4)
13,881
66
18,850
68
25,572
65
42,934
67
Financing revenue, net of financing
expense
21,515
11
19,259
10
42,633
12
37,998
11
Other expense
(845
)
0
(358
)
0
(1,545
)
0
(510
)
0
Other fee-based services, title
operations and other, net
1,120
1
2,467
1
2,407
1
4,598
1
Net carrying cost of VOI inventory
(4,719
)
(2)
(4,013
)
(2)
(9,699
)
(3)
(8,067
)
(2)
Selling and marketing expenses
(106,598
)
(53)
(112,571
)
(57)
(199,125
)
(54)
(196,457
)
(56)
General and administrative
expenses - sales and marketing
(14,957
)
(7)
(13,971
)
(7)
(26,455
)
(7)
(23,932
)
(7)
Operating profit - sales of VOIs and
financing
42,371
21%
35,703
18%
75,045
20%
69,791
20%
Add: Depreciation and amortization
1,897
1,665
3,931
3,314
Sale of vacant land and other assets
(2,912
)
—
(2,893
)
—
Adjusted EBITDA - sales of VOIs and
financing
$
41,356
$
37,368
$
76,083
$
73,105
(1)
Bluegreen owned sales represent sales of
VOIs acquired or developed by Bluegreen.
(2)
Percentages for provision for loan losses
are calculated as a percentage of gross sales of VOIs, which
excludes Fee-Based sales (and not as a percentage of system-wide
sales of VOIs).
(3)
Percentages for costs of VOIs sold and
gross profit are calculated as a percentage of sales of VOIs (and
not as a percentage of system-wide sales of VOIs).
(4)
Percentages for Fee-Based sales commission
revenue are calculated as a percentage of Fee-Based sales (and not
as a percentage of system-wide sales of VOIs).
(5)
Represents the applicable line item,
calculated as a percentage of system-wide sales of VOIs unless
otherwise indicated in the above footnotes.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230802902123/en/
Bluegreen Vacations Holding Corporation
Contact Info Investor Relations: Leo Hinkley, Managing
Director, Investor Relations Officer Telephone: 954-399-7193 Email:
Leo.Hinkley@BVHcorp.com
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