Bluegreen Corporation Reports 2007 First Quarter Results
biz.yahoo.com
Thursday May 3, 6:21 pm ET
-- Bluegreen Resorts Sales Increase to a First Quarter Record $87.1 Million
-- Bluegreen Communities Sales Decline to $34.9 Million
-- Net Income Rises to $5.3 Million, or $0.17 Per Diluted Share
-- Book Value of $11.60 Per Share
BOCA RATON, Fla.--(BUSINESS WIRE)--Bluegreen Corporation (NYSE: BXG), a leading provider of Colorful Places to Live and Play®, today announced financial results for the first quarter ended March 31, 2007 (see attached tables).
Total sales in the first quarter of 2007 were $122.0 million compared to total sales of $121.8 million in the first quarter of 2006, reflecting record Vacation Ownership ("Resorts") sales notwithstanding a decline in Homesite ("Bluegreen Communities") sales. Net income for the first quarter of 2007 rose to $5.3 million, or $0.17 per diluted share, from a net loss of $463,000, or $0.01 per diluted share, in the same period last year. The net loss for the first quarter of 2006 included a cumulative effect of change in accounting principle charge totaling $4.5 million, or $0.14 per diluted share. Income before cumulative effect of change in accounting principle for the first quarter of 2007 rose 32.3% to $5.3 million, or $0.17 per diluted share, from $4.0 million, or $0.13 per diluted share, in the first quarter of 2006.
BLUEGREEN RESORTS
Bluegreen Resorts sales increased 17.6% to a first quarter record $87.1 million from $74.1 million in the first quarter of 2006. Higher Resorts sales were primarily attributable to a 15.2% increase in same-resort sales, led by sales offices at The Fountains resort in Orlando, Florida, the Bluegreen Wilderness Club(TM) at Big Cedar® in Ridgedale, Missouri, MountainLoft(TM) in Gatlinburg, Tennessee, the Smoky Mountain Preview Center in Sevierville, Tennessee, and The Falls Village(TM) resort in Branson, Missouri.
Sales to the Bluegreen Vacation Club® owner base also contributed to improved Resorts results. These sales increased by 27.8% during the first quarter of 2007 as compared to the same period last year, and comprised 38.2% of Resorts sales for the three months ended March 31, 2007 as compared to 33.4% of Resorts sales during the first quarter of 2006.
Higher sales were also attributable, to a lesser extent, to the opening of new sales offices in Las Vegas, Nevada, Wisconsin Dells, Wisconsin, and Williamsburg, Virginia, as well as a system-wide price increase that went into effect during March 2007.
Resorts cost of sales in the first quarter 2007 declined to 21.7% of sales from 23.0% in the first quarter of 2006. During the first quarter of 2007, gross margin was positively impacted by the application of Statement of Financial Accounting Standards No. 152, "Accounting for Real Estate Time-sharing Transactions" ("SFAS 152") and the previously discussed price increase. These increases were partially offset by a higher proportion of Resort sales in relatively higher cost properties.
John M. Maloney Jr., President and Chief Executive Officer of Bluegreen, commented, "The growth at our Resorts segment was robust during the first quarter of 2007, reflecting strong industry demand and increased brand recognition of the Bluegreen Vacation Club®. Construction remains substantially on schedule at our two newest Bluegreen Resorts in Las Vegas and Williamsburg, Virginia. Our Las Vegas property and the first phase of our Williamsburg property are expected to be available for occupancy by the second quarter of 2008 and, in the aggregate, will add approximately 316 new vacation ownership units."
As of March 31, 2007, approximately $32.8 million and $18.4 million of Resorts sales and profits, respectively, were deferred under SFAS 152. These amounts compare to $27.3 million and $15.3 million of sales and profits, respectively, deferred under SFAS 152 as of December 31, 2006. These amounts are expected to be recognized in future periods.
As previously announced, effective January 1, 2006 Bluegreen was required to adopt SFAS 152, which changed many aspects of timeshare accounting, including revenue recognition, inventory costing, and accounting for incidental operations. Please review the Company's public filings for additional information regarding the adoption and impact of SFAS 152.
BLUEGREEN COMMUNITIES
Sales at Bluegreen Communities declined to $34.9 million from $47.6 million in the same period last year, reflecting the substantial sell-out of several communities that were in active sales during the first quarter of 2006 and the impact of the percentage-of-completion method of accounting, partially offset by the commencement of sales at three new Bluegreen Communities subsequent to the first quarter of 2006. As previously announced, Bluegreen Communities is currently in a period of inventory replenishment. In addition, Communities sales in the first quarter of 2006 included $7.0 million of revenue related to the bulk sale of land in California on a non-retail basis; there was no such sale in the first quarter of 2007.
Excluding the impact of percentage-of-completion accounting, several Bluegreen Communities open for more than one year generated higher sales during the first quarter of 2007 as compared to the first quarter of 2006, including The Settlement at Patriot Ranch(TM) (near San Antonio, Texas), Havenwood at Hunter's Crossing(TM) (near San Antonio, Texas), and Sugar Tree on the Brazos (near Dallas/Forth Worth, Texas). Bluegreen Communities also reported strong initial sales at the following Texas properties that commenced sales at various times from September - December 2006: The Bridges at Preston Crossings(TM), a Bluegreen Golf Community (located outside of Dallas, Texas); Vintage Oaks at the Vineyard(TM) (located outside of San Antonio); and King Oaks(TM) (in Grimes County, near College Station).
Bluegreen Communities cost of sales in the first quarter of 2007 was 51.2% of sales as compared to 59.2% in the same period one year ago. In the first quarter of 2006, Communities cost of sales was adversely impacted by the $7.0 million bulk sale of land in California on a non-retail basis.
Mr. Maloney commented, "We are pleased with recent sales levels at Bluegreen Communities, although we recognize the impact that this segment had on our overall results. While the inventory replenishment process is well underway, it will take time to fully address this issue. We are continuing to prudently address our inventory needs at Bluegreen Communities, by adhering to our goal of offering customers homesites in sought after locales while seeking to maintain economic discipline in connection with our purchases. Over the last two quarters, we have commenced sales at three new properties and have recently taken the necessary steps to begin sales at our newest Bluegreen Community -- Sanctuary River Club at St. Andrews Sound(TM) - in the second quarter of 2007."
As of March 31, 2007, approximately $19.0 million and $7.6 million of Bluegreen 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 communities. These amounts compare to $18.6 million and $7.7 million of sales and profits, respectively, deferred as of December 31, 2006. The first quarter of 2007 did not benefit from the net recognition of revenue previously deferred under percentage-of-completion accounting, while the first quarter of 2006 benefited from $4.5 million of net revenue recognized under percentage-of-completion, in addition to the previously mentioned $7.0 million bulk sale of land.
OTHER FINANCIAL INFORMATION
Total positive net interest spread (interest income less interest expense) was $4.7 million in the first quarter of 2007 as compared to $4.9 million in the first quarter of 2006. Interest income increased due to Bluegreen's higher average aggregate balances of notes receivable and retained interests in notes receivable sold, but interest expense also rose due to increased debt related to inventory acquisition and development activities and an increase in the average interest rate on the outstanding balances.
As required of all calendar year-end corporations, Bluegreen adopted FASB Interpretation 48, "Accounting for Uncertainty in Income Taxes- an interpretation of FASB Statement No. 109" ("FIN 48"), effective January 1, 2007. This new accounting standard provides guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The adoption of FIN 48 had no impact on Bluegreen's results of operations, financial position or cash flows.
Bluegreen's balance sheet at March 31, 2007 reflected unrestricted cash of $32.7 million, a book value of $11.60 per share, and a debt-to-equity ratio of 0.86:1. |
