Bluegreen Corporation Reports Record 2005 Third Quarter Financial Results
biz.yahoo.com
Wednesday November 2, 8:31 am ET
BOCA RATON, Fla.--(BUSINESS WIRE)--Nov. 2, 2005--Bluegreen Corporation (NYSE: BXG):
Q3 2005 Highlights Versus Q3 2004
Net income increased 14.4% to $18.7 million, or $0.60 per share
Resorts sales rise 19.0% to $114.4 million
Book value increased to $10.10 at September 30, 2005 from $9.47 at June 30, 2005
Bluegreen Corporation (NYSE: BXG), a leading provider of leisure products and lifestyle choices, today announced record financial results for the third quarter ended September 30, 2005 (see attached tables).
Net income for the third quarter of 2005 increased 14.4% to $18.7 million, or $.60 per diluted share, on approximately 31.2 million weighted average common and common equivalent shares outstanding ("shares outstanding"), compared to net income of $16.3 million, or $.54 per diluted share, on approximately 30.6 million shares outstanding for the third quarter of 2004. Net income for the first nine months of 2005 rose 31.0% to $39.4 million, or $1.26 per diluted share, on approximately 31.2 million shares outstanding, compared to net income of $30.1 million, or $1.02 per diluted share, on approximately 30.6 million shares outstanding for the first nine months of 2004.
Total sales in the third quarter of 2005 increased to $166.8 million from $161.9 million in the same period last year. Higher sales at Bluegreen® Resorts were partially offset by lower sales at the Company's Communities segment (discussed further below). For the first nine months of 2005, total sales increased 14.2% to $430.0 million from $376.4 million in the same period last year.
BLUEGREEN RESORTS
Resorts sales in the third quarter of 2005 increased 19.0% to a third quarter record $114.4 million from $96.1 million in the same period last year. Resorts sales for the first nine months of 2005 rose 17.4% to $277.0 million from $235.9 million in the same period last year.
George F. Donovan, President and CEO of Bluegreen, commented, "We believe that we continue to benefit from the critical mass we have achieved in our Resorts segment and increasing customer acceptance of the Bluegreen Vacation Club® product. Same-Resort sales increases at many of our sales offices, most notably at The Fountains(TM) resort in Orlando, FL, helped drive this segment's growth during the third quarter. In addition, we realized significant sales increases at several of our resorts, including the Bluegreen Wilderness Club at Big Cedar(TM) (Ridgedale, MO), Harbour Lights(TM) (Myrtle Beach, SC), Christmas Mountain Village(TM) (Wisconsin Dells, WI) and Mountain Run at Boyne(TM) (Boyne Falls, MI). New sales sites in Dallas, TX, King of Prussia, PA and The Suites at Hershey(TM) (Hershey, PA) also contributed to higher sales. We are optimistic about the continued success of this segment."
Resorts cost of sales in the third quarter of 2005 declined to 21.8% of sales from 24.8% in the same period last year. Resorts cost of sales decreased to 21.0% during the first nine months of 2005 from 23.5% during the same period one year ago. These decreases reflected a favorable product mix, primarily due to the additional construction of units and increased sales of vacation ownership interests in The Fountains resort, which has a relatively low associated product cost. Resorts cost of sales has more typically ranged from 23% to 25%, and Bluegreen expects that it will be at that level in the future due to rising construction costs and the increased cost of real estate of potential acquisitions.
Mr. Donovan continued, "We continue to expand our network of Bluegreen Vacation Club destinations. As previously announced, we recently acquired a 19-story, 144-unit oceanfront resort (to be renamed SeaGlass Tower(TM)) in Myrtle Beach, South Carolina. Also, our Daytona SeaBreeze Resort in Daytona Beach Shores, Florida, featuring 79 one- and two-bedroom ocean front units, opened for occupancy in July 2005."
BLUEGREEN COMMUNITIES
Communities sales in the third quarter of 2005 declined to $52.4 million from $65.8 million in the same period one year ago, the result of the sell-out of six Communities properties during or prior to the third quarter of 2005. As of September 30, 2005, approximately $37.8 million and $16.0 million of Communities sales and profits, respectively, were deferred under the percentage-of-completion method of accounting. It is expected that these amounts will be recognized in future periods ratably with the development of the projects.
Mr. Donovan commented, "As we announced in March 2005, the high level of sales achieved in the Communities segment during 2004 and 2005 resulted in some of our properties either selling out or on pace to sell out earlier in 2005 than previously expected. We have always relied on the acquisition of new properties in order to meet our ongoing inventory needs, and this remains the case. Our acquisition efforts are evidenced by the commencement of sales at two Texas properties - SugarTree on the Brazos (in January) and Saddle Creek Ranch (in April). In the summer of 2005, we acquired two additional properties in Texas totaling approximately 2,600 acres. One of these projects - The Settlement at Patriot Ranch near San Antonio - commenced sales in August 2005, while the other - Havenwood at Hunter's Crossing, also near San Antonio -- is expected to commence sales in early 2006."
Mr. Donovan continued, "We believe that our acquisition pipeline is robust. Our team of experienced real estate professionals continues to identify new potential acquisitions and to review target properties to determine if they meet our quality and economic standards. Although we have not yet completed our acquisitions, we have made significant progress towards the acquisition of substantial new properties in our existing markets, and anticipate closing on at least one of these transactions in early 2006."
Communities cost of sales was 53.2% as compared to 53.1% in the third quarter of 2005. Communities cost of sales declined to 51.5% in the first nine months of 2005 from 54.4% in the same period last year, as a higher percentage of total sales in 2005 were comprised of golf properties, which generally have higher associated gross margins.
FINANCIAL METRICS AND POSITION
Total positive net interest spread (interest income less interest expense) was $5.2 million in the third quarter of 2005 as compared to $2.5 million in the third quarter of 2004. Interest income increased primarily as a result of a higher average portfolio of vacation ownership notes receivable held during the third quarter of 2005 compared to the same period one year ago, while interest expense declined primarily as a result of lower average debt outstanding.
Bluegreen's balance sheet at September 30, 2005 reflected unrestricted cash of $68.0 million, a book value of $10.10 per share compared to a book value of $9.47 per share at June 30, 2005, and a debt-to-equity ratio of 0.66:1 as compared to 0.70:1 at June 30, 2005. |
