Bluegreen Corporation Reports Record Third Quarter Financial Results
biz.yahoo.com
Tuesday October 26, 8:31 am ET
BOCA RATON, Fla.--(BUSINESS WIRE)--Oct. 26, 2004--Bluegreen Corporation (NYSE:BXG)
Q3 2004 vs. Q3 2003 Highlights
Net income increased 60% to $16.3 million, or $.54 per diluted
share
Bluegreen Resorts sales rose 15% to $96.1 million
Bluegreen Communities sales up 163% to $65.8 million
Total operating revenues increased 48% to $190.6 million
Bluegreen Corporation (NYSE:BXG - News), a leading U.S. developer and marketer of drive-to vacation ownership resorts ("Bluegreen Resorts") and planned residential and golf communities ("Bluegreen Communities"), today announced record financial results for the third quarter and nine months ended September 30, 2004 (see attached tables).
George F. Donovan, President and Chief Executive Officer of Bluegreen®, commented, "Total operating revenues and net income for the first nine months of 2004 exceeded total operating revenues and net income for all of 2003. We are very pleased with the current pace of sales of new and existing Resort and Communities properties. The quality of these properties, the effectiveness of our marketing programs and the dedication of our people are driving the growth of the Bluegreen Vacation Club®. Membership in the Club rose 20% to approximately 90,000 members during the first nine months of 2004 from approximately 75,000 members at December 31, 2003."
RECORD NET INCOME
Net income for the third quarter of 2004 increased 60% to $16.3 million, or $.54 per diluted share, on approximately 30.6 million weighted average common and common equivalent diluted shares outstanding ("shares outstanding"), compared to net income of $10.2 million, or $.36 per diluted share, on approximately 29.4 million shares outstanding, for the same period last year. Net income for the first nine months of 2004 rose 62% to $30.1 million, or $1.02 per diluted share, on approximately 30.6 million shares outstanding, from net income of $18.6 million, or $.68 per diluted share, on approximately 29.1 million shares outstanding, for the same period last year.
Record net income for the 2004 three and nine month periods included a one-time, pre-tax settlement expense of $1.3 million, or $0.03 per diluted share, related to a previously disclosed sales tax assessment with the State of Wisconsin Department of Revenue ("DOR"). Bluegreen believes this to be a favorable settlement and is pleased to have resolved this matter with the DOR.
RECORD RESORTS AND COMMUNITIES RESULTS
Resorts sales in the third quarter of 2004 increased 15% to a record $96.1 million from $83.9 million in the same period last year. Resorts sales for the first nine months of 2004 rose 23% to $235.9 million from $191.1 million for the comparable prior year period.
Higher sales in both periods were due primarily to double-digit same-Resort sales increases at many of Bluegreen's sales offices, including: Harbour Lights(TM) in Myrtle Beach, SC; Big Cedar® Wilderness Club(TM) located just outside of Branson, MO; Christmas Mountain Village(TM) in Wisconsin Dells, WI; MountainLoft(TM) in Gatlinburg, TN; and Laurel Crest(TM) in Pigeon Forge, TN. The Company also experienced strong sales at properties opened less than 12 months, namely The Fountains(TM) resort in Orlando, FL and Grande Villas at World Golf Village® in St. Augustine, FL, as well as at its new offsite sales office in Destin, FL.
Communities sales in the third quarter of 2004 increased 163% to a record $65.8 million from $25.0 million in the same period last year. For the first nine months of 2004, Communities sales rose 114% to $140.5 million from $65.7 million in the same period last year.
Higher communities sales were the result of strong sales of communities opened for less than 12 months, including: Chapel Ridge(TM), a Bluegreen Golf Community located in Chatham County, NC; Sanctuary Cove at St. Andrews Sound(TM), a Bluegreen Golf Community located in Brunswick, GA; and Mountain Springs Ranch(TM), in the Texas Hill Country. These sales increases were supported by solid same-project sales growth at: Brickshire(TM), a Bluegreen Golf Community located near Richmond, VA; Catawba Falls Preserve(TM), in Black Mountain, NC; Mystic Shores(TM) in Spring Branch, TX; Ridge Lake Shores(TM) near Houston, TX; and Quail Springs Ranch(TM) in Peaster, TX.
Recognition of Communities sales in the third quarter of 2004 was impacted positively by approximately $2.8 million, due to the effect of percentage-of-completion accounting.
As of September 30, 2004, approximately $34.3 million and $13.8 million of sales and profits, respectively, were deferred under the percentage-of-completion method of accounting. Significantly all of these deferred sales and profits were related to the Communities business. It is expected that these amounts will be recognized in future periods ratably with the development of the projects.
OTHER REVENUES
Total positive net interest spread (interest income less interest expense) was $2.8 million in the third quarter of 2004 as compared to $791,000 in the third quarter of 2003. Interest income increased primarily as a result of a higher average portfolio of vacation ownership notes receivable during the third quarter of 2004 compared to the same period one year ago, while interest expense declined primarily as a result of more interest being capitalized due to increased resort construction activity.
Gain on sale of notes receivable in the third quarter of 2004 increased to $3.3 million from $476,000 in the same period last year, due primarily to the completion of the previously announced $156.6 million private offering of timeshare receivable-backed securities. In addition, $45.2 million of timeshare receivables were sold during the third quarter of 2004 compared to $8.4 million in the third quarter of 2003.
THIRD QUARTER OPERATING METRICS
Despite a 49% increase in total sales and a 48% increase in total operating revenues, selling, general and administrative expenses ("S,G&A") as a percentage of these sales declined during the third quarter of 2004 versus both the prior year period and the second quarter of 2004. During the 2004 third quarter, S,G&A as a percentage of total sales declined to 48% from 54% in the third quarter of 2003 and from 52% from the second quarter of 2004. S,G&A as a percentage of total operating revenues declined to 41% from 46% in the third quarter of 2003 and from 44% in the second quarter of 2004.
FINANCIAL POSITION
Bluegreen's balance sheet at September 30, 2004 reflected a book value of $8.60 per share, compared to a book value of $7.50 per share at December 31, 2003, and a debt-to-equity ratio of 1.08:1 as compared to 1.38:1 at December 31, 2003. From December 31, 2003 through September 30, 2004, holders of $6.8 million in principal amount of Bluegreen's 8.25% Convertible Subordinated Debentures due 2012 elected to convert their holdings into shares of the Company's common stock at a conversion price of $8.24 per share.
On September 30, 2004, Bluegreen extended through September 29, 2005 its previously disclosed $100 million revolving vacation ownership receivables purchase facility with Resort Finance LLC ("Resort Finance"). On September 29, 2004, Bluegreen sold $25.9 million in vacation ownership receivables to Resort Finance pursuant to the terms of this agreement for net proceeds of $22.0 million in cash. These proceeds will be used for general operating purposes. Based on this sale, the remaining availability under the Resort Finance purchase facility is $78.0 million. The Resort Finance facility along with the previously announced $125 million vacation ownership receivables purchase facility through GE Commercial Finance Real Estate, will continue to provide liquidity from Bluegreen's vacation ownership receivables portfolio.
ABOUT BLUEGREEN CORPORATION
Bluegreen is one of the leading companies engaged in the acquisition, development, marketing and sale of vacation ownership resorts and residential homesites. Bluegreen Resorts are located in a variety of popular vacation destinations, including: Marathon, Florida; Orlando, Florida; Ormond Beach, Florida; St. Augustine, Florida; Surfside, Florida; the Smoky Mountains of Tennessee; Myrtle Beach, South Carolina; Charleston, South Carolina; Wisconsin Dells, Wisconsin; Gordonsville, Virginia; Hershey, Pennsylvania; Branson, Missouri; Ridgedale, Missouri; Boyne Falls, Michigan; and Aruba, while Bluegreen Communities are predominantly located in the Southeastern and Southwestern United States.
This press release contains forward-looking statements and the Company desires to take advantage of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 in connection with these statements. Statements contained herein are not statements of historical fact may be deemed forward-looking statements. The words "believe," "expect," "intend," "anticipate," "project," "may," "should," "designed to," "estimate," "hope," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. The Company does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements are based on current expectations and assumptions and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and many of which are beyond the Company's control. Future events could differ materially from those set forth in, contemplated by, or underlying such forward-looking statements. The risks and uncertainties to which forward-looking statements are subject to include, but are not limited to, the following: general economic conditions, the continued success of Bluegreen's sales and marketing strategies, the continued acceptance of the Bluegreen Vacation Club, that S,G&A as a percentage of sales or operating revenues may increase, that the timeshare purchase facilities will not be available pursuant to their terms or that future sales contemplated under the timeshare purchase facilities referred to above will not be consummated, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including its most recent Form 10-K filed on March 29, 2004 and its Quarterly Report on Form 10-Q to be filed on or about November 15, 2004. |
