FORT LAUDERDALE, FL (May 12, 2015) — BBX Capital Corporation (“BBX Capital,” and/or the “Company”) (NYSE: BBX) reported financial results for the three months ended March 31, 2015.
First Quarter 2015:
BBX Capital reported net income of $0.9 million, or $0.06 per diluted share, for the quarter ended March 31, 2015, versus net income of $1.3 million, or $0.08 per diluted share, for the quarter ended March 31, 2014.
As of March 31, 2015, BBX Capital had consolidated total assets of $385.5 million, and shareholders’ equity of $312.2 million. BBX Capital’s book value per share was $19.30 at March 31, 2015, versus $19.16 at March 31, 2014.
BBX Capital’s Chairman and Chief Executive Officer, Mr. Alan B. Levan, commented, “We are pleased with the overall progress of our company during the quarter. Our results reflect the pursuit of our broader goal of transitioning into a business with diverse cash flow streams and a focus on long term growth through our operating businesses and real estate opportunities, while monetizing our legacy portfolios.”
Overview and Highlights:
BBX Capital Selected Financial Data (Consolidated)
First Quarter, 2015 Compared to First Quarter, 2014
- Total revenues of $21.7 million vs. $20.8 million
- Net Income attributable to BBX Capital of $1.0 million vs. Net income attributable to BBX Capital of $1.4 million
- Diluted earnings per share of $0.06 vs. $0.08
- Book value per share of $19.30 vs. $19.16
- Total assets of $385.5 million vs. $416.9 million
- BB&T’s preferred interest in FAR was $6.1 million vs. $54.5 million
- Real estate holdings were $123.1 million vs. $141.9 million
- Loans receivable were $26.6 million vs. $59.6 million
- Loans held-for-sale were $32.1 million vs. $50.7 million
As previously announced, on April 30, 2015, BFC Financial Corporation (“BFC”) (OTCQB: BFCF) completed a tender offer to purchase 4,771,221 shares of BBX Capital’s Class A Common Stock at a cash purchase price of $20.00 per share for an aggregate purchase price of approximately $95.4 million. Prior to the tender offer, BFC owned approximately 51% of the issued and outstanding shares of BBX Capital’s Class A Common Stock and all of the issued and outstanding shares of BBX Capital’s Class B Common Stock. Collectively, those shares represented an approximate 51% equity interest and 74% voting interest in BBX Capital. As a result of the tender offer, BFC now owns approximately 81% of the issued and outstanding shares of BBX Capital’s Class A Common Stock, which together with the shares of BBX Capital’s Class B Common Stock owned by BFC, represent an approximately 81% equity interest and 90% voting interest in BBX Capital.
The following provides financial and other information regarding our assets, including our real estate joint ventures, our BankAtlantic legacy portfolio of loans and foreclosed real estate, acquired operating businesses, and our investment in Bluegreen.
BBX Capital Real Estate
Real Estate Investments and Acquisitions
BankAtlantic Legacy Assets – Loans and Real Estate:
On May 6, 2015, BBX Capital repaid the remaining balance of $6.1 million of BB&T Corporation’s preferred membership interest in Florida Asset Resolution Group, LLC (“FAR”). As a result, BBX Capital is now the sole owner of FAR, which held assets of approximately $94.8 million as of March 31, 2015. FAR was formed in connection with the 2012 sale of BankAtlantic to BB&T when BankAtlantic contributed to FAR certain performing and non-performing loans, tax certificates and foreclosed real estate with a carrying value of approximately $346 million as of July 31, 2012 and $50 million of cash. Upon consummation of the BB&T Transaction, BBX Capital transferred to BB&T Corporation a 95% preferred interest in the net cash flows of FAR which BB&T Corporation held until it had recovered an aggregate $285 million in preference amount plus a priority return of LIBOR + 200 basis points per annum on any unpaid preference amount. As a result of the repayment of its preferred membership interest, BB&T Corporation’s interest in FAR has been fully redeemed, and FAR is now wholly-owned by the Company. (Detailed information and financial tables relating to CAM and BBX Partner Loans, CAM and BBX Partners Real Estate, FAR LOANS, and FAR Real Estate are attached to this release.)
Recent Announcements by BBX Capital Real Estate:
On April 21, 2015, we announced that we had entered into contracts with a third party developer to sell two North Flagler properties located in West Palm Beach, Florida consisting of two land parcels: a 4.5 acre tract overlooking the Intracoastal Waterway in West Palm Beach, Florida owned by a joint venture in which we own a significant majority interest and a 2.7 acre parcel owned by the Company. The contracts are subject to due diligence of the buyer who may terminate the contracts at any time prior to May 11, 2015 without any financial obligation to the joint venture or the Company.
On April 28, 2015, we announced that our joint venture with CC Homes, a Codina-Carr Company, had received an additional $34.8 million in funding from Florida Community Bank to begin development of the Bonterra community in Hialeah, Florida, located in Miami-Dade County. Florida Community Bank has provided the joint venture with a construction and acquisition loan that now totals approximately $43 million to develop the property. More complete and detailed information regarding the BBX Capital Real Estate joint venture with CC Homes, a Codina-Carr Company, as well as the Bonterra master-planned community, is provided in the Appendix which is attached to this release.
BBX Capital Partners
Investments and Acquisitions of Operating Companies during the Quarter
BBX Sweet Holdings:
In April 2015, BBX Sweet Holdings, a wholly-owned subsidiary of BBX Capital, acquired the assets of Kencraft Confections, headquartered in American Fork, just outside of Salt Lake City, Utah. More complete and detailed information regarding Kencraft Confections is provided in the Appendix which is attached to this release.
More complete and detailed information regarding the holdings under BBX Capital Partners and BBX Sweet Holdings is provided in the Appendix which is available to view at the end of this release.
Bluegreen is a sales, marketing and resort management company, focused on the vacation ownership industry. As previously indicated, Bluegreen is a wholly owned subsidiary of Woodbridge (“Woodbridge”). BBX Capital owns a 46% interest in Woodbridge Holdings, LLC and BFC Financial Corporation (“BFC”), BBX Capital’s parent company, owns the remaining 54% of Woodbridge. Woodbridge’s principal asset is its 100% ownership of Bluegreen Corporation (“Bluegreen”).
For the quarter ended March 31, 2015, net income attributable to Woodbridge was $12.6 million, of which $13.3 million related to the operations of Bluegreen. BBX Capital recognized 46% of the net income attributable to Woodbridge, or $5.8 million, for the quarter ended March 31, 2015.
Bluegreen Selected Financial Data
First Quarter, 2015 Compared to First Quarter, 2014
- System-wide sales of Vacation Ownership Interests (“VOIs”) were $109.2 million vs. $109.9 million
- Included in the above were sales of VOIs under Bluegreen’s “capital-light” business strategy(1), which were $64.4 million vs. $66.8 million
- Other fee-based services profits rose 6% to $11.3 million from $10.7 million
- Net income was $16.1 million vs. $17.1 million
- EBITDA was $30.8 million vs. $32.7 million (2)
|(1)||Bluegreen’s sales of VOIs under its capital-light business strategy include sales of VOIs under fee-based sales and marketing arrangements, just-in-time inventory acquisition arrangements, and secondary market arrangements. Bluegreen enters into agreements with third party developers that allow Bluegreen to buy VOI inventory from time to time in close proximity to the timing of when Bluegreen intends to sell such VOIs and refers to this as “Just in Time” arrangements. Bluegreen also acquires VOI inventory from resorts’ property owner associations (“POAs”) and other third parties close to the time Bluegreen intends to sell such VOIs. Such VOIs are typically obtained by the POAs through foreclosure in connection with maintenance fee defaults, and are generally acquired by Bluegreen at a significant discount. Bluegreen refers to sales of inventory acquired through these arrangements as “Secondary Market Sales”.|
|(2)||See the supplemental tables included in this release for a reconciliation of EBITDA to net income.|
Bluegreen Summary for the First Quarter, 2015
System-wide sales of VOIs include all sales of VOIs, regardless of whether Bluegreen or a third-party owned the VOI immediately prior to the sale. The sales of third-party owned VOIs are transacted as sales of timeshare interests in the Bluegreen Vacation Club through the same selling and marketing process Bluegreen uses to sell its VOI inventory. System-wide sales of VOIs were $109.2 million and $109.9 million during the 2015 first quarter and the 2014 first quarter, respectively.
Included in system-wide sales are Fee-Based sales, Just-In-Time sales, Secondary Market sales and legacy sales. Fee-Based sales, Just-in-Time sales and Secondary Market sales are included in Bluegreen’s “capital-light” business model. Bluegreen determines which VOIs are sold based on several factors, including the requirements of Fee-Based sales clients, debt service requirements and default resale requirements under term securitization and similar transactions. In addition, Bluegreen accounts for equity trade allowances granted to consumers by deducting them from the specific sale on which the allowance was granted. These factors can cause fluctuations in the amount of net sales by category from period to period. Sales by category are tracked based on which deeded VOI is conveyed in each transaction. Capital light sales represented 59% of Bluegreen’s system-wide sales in the 2015 first quarter.
Selling and marketing expenses were 52% of system-wide sales during the 2015 first quarter as compared to 48% during the 2014 fourth quarter. The increase in selling and marketing expenses during the first quarter of 2015 compared to the first quarter of 2014 was a result of Bluegreen’s focus on increasing marketing efforts to new prospects as opposed to existing owners, which resulted in higher costs per tour from new and expanding marketing channels. Sales to existing owners generally involve lower marketing expenses than sales to new prospects; however, a new program which contributed to owner sales has a slightly higher cost per tour as compared to historical owner sales tours. Bluegreen expects to continue to increase its focus on sales to new prospects as well as the new program for owner sales and, as a result, sales and marketing expenses generally and as a percentage of sales may increase.
Other Fee-Based Services pre-tax profits, which are primarily generated from providing resort and club management services as well as title services, increased 6% to $11.3 million from $10.7 million. As of March 31, 2015 and 2014, Bluegreen managed 48 and 47 timeshare resort properties and hotels, respectively.
As a result of the above, Bluegreen’s net income was $16.1 million in the 2015 first quarter as compared to $17.1 million in the 2014 first quarter.
In the 2015 first quarter Bluegreen completed a securitization involving the issuance of $117.8 million of investment-grade rated securities. The issuance was completed through BXG Receivables Note Trust 2015-A and was comprised of $89.4 million of A rated vacation ownership loan backed notes and $28.4 million of BBB-/BBB rated vacation ownership loan backed notes. The notes have interest rates of 2.88% and 3.47% respectively, for an overall weighted average interest rate of 3.02%. The gross advance rate for this transaction was 94.25%. A portion of the proceeds received to date from the securitization were used to repay balances outstanding under certain of Bluegreen’s receivable-backed notes payable, with the remaining proceeds expected to be used for general corporate purposes.
Please see the supplemental tables included in this release for detailed information on Bluegreen’s System-wide sales of VOIs and a reconciliation of Net income to EBITDA.
Financial data for BBX Capital Corporation, Woodbridge Holdings, LLC and Bluegreen Corporation is provided in the supplemental financial tables included in this release.
More complete and detailed information regarding BBX Capital and its financial results, business, operations and risks, is available in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, and its Annual Report on Form 10-K for the year ended December 31, 2014, which are available to view on the SEC’s website, www.sec.gov, or on BBX Capital’s website, www.BBXCapital.com.
For more detailed information regarding Bluegreen and its financial results, business, operations and risks, please see BFC’s financial results press release for the quarter ended March 31, 2015, BFC’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, and BFC’s Annual Report on Form 10-K for the year ended December 31, 2014, which are available on the SEC’s website, www.sec.gov and/or BFC’s website, www.BFCFinancial.com.
About BBX Capital Corporation:
BBX Capital (NYSE: BBX) is involved in the acquisition, ownership and management of joint ventures and investments in real estate and real estate development projects, as well as acquisitions, investments and management of middle market operating businesses. In addition, BBX Capital and its controlling shareholder, BFC Financial Corporation (OTCQB: BFCF), have a 46% and 54% respective ownership interest in Bluegreen Corporation. As a result of their ownership interests, BBX Capital and BFC together own 100% of Bluegreen. Bluegreen manages, markets and sells the Bluegreen Vacation Club, a flexible, points-based, deeded vacation ownership plan with more than 180,000 owners, over 65 owned or managed resorts, and access to more than 4,500 resorts worldwide. As of March 31, 2015, BBX Capital had total consolidated assets of $385.5 million, shareholders’ equity attributable to BBX Capital of approximately $312.2 million, and total consolidated equity of approximately $313.5 million. BBX Capital’s book value per share at March 31, 2015 was $19.30.
For further information, please visit our family of companies:
BBX Capital: www.BBXCapital.com
Bluegreen Corp.: www.BluegreenVacations.com
BBX Sweet Holdings: www.BBXSweetHoldings.com
Renin Corp.: www.ReninCorp.com
BFC Financial Corporation: www.BFCFinancial.com
About BFC Financial Corporation :
BFC (OTCQB: BFCF) (OTCQB: BFCFB) is a holding company whose principal holdings include a 81% ownership interest in BBX Capital Corporation (NYSE: BBX) and its indirect ownership interest in Bluegreen Corporation. BFC owns a 54% equity interest in Woodbridge, the parent company of Bluegreen. BBX Capital owns the remaining 46% equity interest in Woodbridge. Bluegreen manages, markets and sells the Bluegreen Vacation Club, a flexible, points-based, deeded vacation ownership plan with more than 180,000 owners, over 65 owned or managed resorts, and access to more than 4,500 resorts worldwide. As of March 31, 2015, BFC had total consolidated assets of approximately $1.4 billion, shareholders’ equity attributable to BFC of approximately $256.6 million, and total consolidated equity of approximately $454.3 million. BFC’s book value per share at March 31, 2015 was $3.08.
About Bluegreen Corporation:
Founded in 1966 and headquartered in Boca Raton, FL, Bluegreen Corporation (“Bluegreen Vacations”) is a sales, marketing and resort management company, focused on the vacation ownership industry and pursuing a capital-light business strategy. Bluegreen manages, markets and sells the Bluegreen Vacation Club, a flexible, points-based, deeded vacation ownership plan with more than 180,000 owners, over 65 owned or managed resorts, and access to more than 4,500 resorts worldwide. Bluegreen also offers a portfolio of comprehensive, turnkey, fee-based service resort management, financial services, and sales and marketing on behalf of third parties. For more information, visitwww.BluegreenVacations.com.
This press release contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. All opinions, forecasts, projections, future plans or other statements, other than statements of historical fact, are forward-looking statements and may include words or phrases such as “plans,” “believes,” “will,” “expects,” “anticipates,” “intends,” “estimates,” “our view,” “we see,” “would” and words and phrases of similar import. The forward looking statements in this press release are also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve substantial risks and uncertainties. We can give no assurance that such expectations will prove to be correct. Future results could differ materially as a result of a variety of risks and uncertainties, many of which are outside of the control of management. These risks and uncertainties include, but are not limited to the impact of economic, competitive and other factors affecting the Company and its assets, including the impact of decreases in real estate values or high unemployment rates on our business generally, the value of our assets, the ability of our borrowers to service their obligations and the value of collateral securing our loans; the risk that loan losses will continue and the risks of additional charge-offs, impairments and required increases in our allowance for loan losses; the impact of and expenses associated with litigation including but not limited to litigation brought by the SEC and the risks associated with the adverse verdict in that matter, including the risks relating to the financial fine, a claim for reimbursement of insurance coverage advances, the risk of loss of Mr. Levan’s services as CEO and reputational risk; adverse conditions in the stock market, the public debt market and other financial and credit markets and the impact of such conditions on our activities; the risk that the assets retained by the Company in CAM and FAR may not be monetized at the values currently ascribed to them; and the risks associated with the impact of periodic valuation of our assets for impairment. In addition, this press release contains forward looking statements relating to the Company’s ability to successfully implement its currently anticipated business plans, which may not be realized as anticipated, if at all, and the Company’s investments in real estate developments, real estate joint ventures and operating businesses may not achieve the returns anticipated or may not be profitable, including its acquisition of Renin Corp., and its acquisitions by BBX Sweet Holdings in the candy and confections industry. The Company’s investments in real estate developments, either directly or through joint ventures, will increase exposure to downturns in the real estate and housing markets or expose us to risks associated with real estate development activities, including risks associated with obtaining zoning and entitlements, the risk that our joint venture partners may not fulfill their obligations, and the risk that the projects will not be developed as anticipated or be profitable. Additionally, pending contracts to sell real estate entered into by the Company or its joint ventures may not be completed on the terms provided in the contract, or at all. The Company’s investment in Woodbridge, which owns Bluegreen Corporation, exposes the Company to risks of Bluegreen’s business and its ability to pay dividends to Woodbridge, and risks inherent in the time-share industry, which risks are identified in BFC’s Annual Report on Form 10-K filed on March 16, 2015 with the SEC and available on the SEC’s website, www.sec.gov. BBX Sweet Holdings acquisitions and the Company’s acquisition of Renin Corp. exposes us to the risks of their respective businesses, which includes the amount and terms of indebtedness associated with the acquisitions which may impact our financial condition and results of operations and limit our activities; the failure of the companies to meet financial covenants and that BBX Capital may be required to make further capital contributions or advances to the acquired companies; as well as the risk that the integration of these operating businesses may not be completed effectively or on a timely basis, and that the Company may not realize any anticipated benefits or profits from the transactions. Further, Renin’s operations expose us to foreign currency exchange risk of the U.S. dollar compared to the Canadian dollar and Great Britain Pound. Past performance and perceived trends may not be indicative of future results. In addition to the risks and factors identified above, reference is also made to other risks and factors detailed in reports filed by the Company with the Securities and Exchange Commission, which are available in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, and its Annual Report on Form 10-K for the year ended December 31, 2014, which may be viewed on the SEC’s website,www.sec.gov, or on BBX Capital’s website, www.BBXCapital.com. BBX Capital cautions that the foregoing factors are not exclusive.
Source: BBX Capital Corporation and BFC Financial Corporation