Bluegreen Announces Record Fourth Quarter and Year End Results
BOCA RATON, Fla.--(BUSINESS WIRE)--May 13, 1998--Bluegreen Corporation (NYSE:BXG - news), a leading U.S. developer and marketer of timeshare resorts and residential land, today announced record financial results for the fourth quarter and year ended March 29, 1998 (see attached table).
Total Revenues Rise 88.5%; Operating and Net Income Reach Record Levels
Total revenues for the three months and fiscal year ended March 31, 1998 increased 88.5% and 61.9%, respectively, to $55.8 million and $187.6 million from the comparable prior year periods, both records. Operating income for the fiscal 1998 fourth quarter was $5.1 million versus a loss of $1.5 million for the prior like quarter. Operating income for fiscal 1998 improved dramatically to $16.7 million from an operating loss of $7.6 million last year. Net income for the fiscal 1998 fourth quarter increased to a record $3.0 million, or $0.15 per share (basic) and $0.13 per share (diluted), versus a net loss of $832,000, or $(.04) per share, for the same period last year. Net income for the 1998 fiscal year improved to $10.0 million, or $0.49 per share (basic) and $0.46 per share (diluted), as compared to a net loss of $4.4 million, or $(0.21) per share, last year.
Annual Timeshare Sales Rise 123%; Land Sales Up 46%
Timeshare sales in the fourth quarter rose 222% to $21.3 million from $6.6 million in the comparable prior year period. Timeshare sales for fiscal 1998 climbed 123% to $61.2 million from $27.4 million last year. These increases reflect the successful implementation of a new business model which is focused on expanding Bluegreen's presence in the timeshare industry. Timeshare sales for the fiscal fourth quarter grew to represent 42.5% of total sales of real estate, up from 23.6% for the comparable prior year period. Timeshare sales for fiscal 1998 comprised 35.4% of total sales of real estate, up from 25.0% of total sales of real estate last year. Management believes that timeshare sales will approximate 50% of total sales of real estate by the end of fiscal 1999. Sales from the Company's land division (lot sales) in the fiscal fourth quarter increased 51.2% to $27.2 million from the comparable prior year period, while fiscal 1998 land sales increased 46.1% to $106.1 million.
Higher timeshare sales for the fourth quarter and fiscal year ended March 31, 1998 are due primarily to approximately $9.0 million of timeshare sales generated by RDI Group, Inc., which Bluegreen acquired on September 30, 1997, and two new resort properties which became operational during fiscal 1998 - Harbour Lights in Myrtle Beach, SC and The Falls Village in Branson, MO. Additional contributing factors include $4.6 million of revenues generated as a result of the December 1997 acquisition, through a 50%-owned joint venture, of the unsold timeshare inventory of La Cabana Beach & Racquet Club in Aruba, the seasoning of existing resorts from the prior year periods and increased effectiveness of new and additional marketing programs.
Increased land division sales for the fiscal 1998 fourth quarter and year are attributable to a combination of the Company's focused shift towards providing higher amenity lots to a more upscale, single- family, primary/residential customer base and the development and sales of new golf community properties, along with increased demand for the Company's Arizona property. This shift is evidenced by an increase in the average list selling price of the Company's residential lots to $42,750 and $44,620 for the fiscal 1998 fourth quarter and year from $42,229 and $38,572 for the comparable prior year periods, respectively.
Other resort service revenue for the fiscal 1998 fourth quarter was approximately $2.1 million and $3.7 million for the period October 1, 1997 to March 31, 1998. Other resort service revenue includes revenues from resort property management services, resort title services and certain retail amenity and lodging operations acquired with RDI Group, Inc.
Fiscal 1998 Operating Efficiencies Improve; Interest Income Reaches Record Levels
Selling, general and administrative expenses (''S,G&A'') as a percentage of revenues for the fiscal 1998 fourth quarter decreased to 44.2% from 45.2% for the fiscal 1997 fourth quarter. For the 1998 fiscal year, S,G&A as a percentage of revenues decreased to 42.7% from 44.4% last year. This is due primarily to a strategic emphasis placed on controlling costs, coupled with achieving the critical revenue mass in the timeshare division to support the existing infrastructure. During fiscal 1997, Bluegreen initiated a plan to focus its land sales effort on fewer, more profitable markets. As a result of this initiative, the provision for losses for fiscal 1997 included a non-recurring $4.8 million after-tax charge. During fiscal 1998, Bluegreen accelerated its efforts to sell these unprofitable land parcels and has decreased its holdings in this area dramatically with no additional charges. The Company expects to divest the remaining properties in this portfolio over the next 12 months with no accompanying significant write-downs.
The growth in timeshare revenues also contributed to significant increases in the Company's receivable portfolio, which generated interest income of $3.5 million and $10.8 million, respectively, for the fiscal 1998 fourth quarter and year, compared to $1.6 million and $6.2 million, respectively, for the comparable prior year periods. Bluegreen finances approximately 85% - 90% of its timeshare sales.
George Donovan, President and Chief Executive Officer of Bluegreen, commented, ''By any measure, fiscal 1998 was the most successful in Bluegreen's history. These record results illustrate Bluegreen's evolution into a full-service, fully-integrated timeshare and land development company. During fiscal 1998 we acquired RDI Group, Inc. and, through a 50%-owned joint venture, the unsold timeshare inventory of La Cabana Beach & Racquet Club. We have also begun new construction at several of our resort properties, including MountainLoft, Laurel Crest and Harbour Lights. We believe these actions have increased Bluegreen's annual timeshare revenue run rate to approximately $100 million and established the Company as a major player in the highly fragmented and rapidly growing resort industry. The acquisition of RDI Group will provide us with the opportunity to integrate a point-based vacation club into our existing timeshare network. The Bluegreen Vacation Club should be activated later this year and will provide owners with the flexibility they desire, allowing them to choose their destinations, times and lengths of stay from their vacation ownership.''
''These results also validate our tightly focused land development strategy, in which Bluegreen concentrates only on those markets identified as most profitable. Bluegreen's first daily fee golf course, The Carolina National Golf Club, opened in November 1997 to critical and commercial acclaim. This course will serve as the model for future Bluegreen golf clubs, and is a part of our long-term plan to enhance the Company's revenue diversification and capitalize on this rapidly growing market.''
Bluegreen is one of the leading companies engaged in the acquisition, development, marketing and sale of timeshare resorts and residential land. The Company's land operations are predominantly located in the Southeastern and Southwestern United States, while its timeshare resorts are located in a variety of popular vacation destinations including the Smoky Mountains of Tennessee; Myrtle Beach, South Carolina; Branson, Missouri; Orlando, Florida; Wisconsin Dells, Wisconsin; and Aruba.
This press release contains forward-looking statements. The words ''believe,'' ''expect,'' ''intend,'' ''anticipate,'' and ''project,'' and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. The Company undertakes no 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 inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future events and actual results 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 include, but are not limited to, regulatory changes, national or regional economic conditions that can affect the real estate market, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.
BLUEGREEN CORPORATION
Fourth Quarter Earnings Report
(In 000's, Except Per Share Data)
Three Months Ended Year Ended
March 29, March 30, March 29, March 30,
1998 1997 1998 (a) 1997
REVENUES:
Lot sales $ 27,241 $ 18,017 $106,070 $ 72,621
Timeshare sales 21,318 6,621 61,199 27,426
Home sales 1,646 3,372 5,838 9,675
Total sales of real estate 50,205 28,010 173,107 109,722
Other resort service revenue 2,080 -- 3,665 --
Interest income 3,494 1,581 10,819 6,159
Total operating revenues 55,779 29,591 187,591 115,881
EXPENSES:
Cost of sales 19,455 15,707 74,732 57,091
Cost of other resort services 1,417 -- 2,926 --
Selling, general and
administrative expense 24,646 13,389 80,173 51,441
Interest expense 3,554 1,544 10,067 5,459
Provisions for losses 1,653 438 3,002 9,539
Total operating expenses 50,725 31,078 170,900 123,530
Income (loss) from operations 5,054 (1,487) 16,691 (7,649)
Other income 192 76 312 259
Income (loss) before taxes 5,246 (1,411) 17,003 (7,390)
Provision (benefit) for
income taxes 2,030 (579) 6,803 (3,030)
Minority interest in income of
consolidated subsidiary 200 -- 200 --
Net income (loss) $ 3,016 $ (832) $10,000 $ (4,360)
Net income (loss) per share:
Basic $ 0.15 $ (0.04) $ 0.49 $ (0.21)
Diluted(b) $ 0.13 $ (0.04) $ 0.46 $ (0.21)
Weighted average number of common
and common equivalent shares:
Basic 20,389 20,159 20,219 20,319
Diluted(b) 26,983 20,159 25,746 20,319
(a) Results for the 1997 fiscal year included a non-recurring after-tax charge of approximately $4,800,000 for the write-down of certain inventories which have been targeted for disposition through bulk sale or aggressive marketing at reduced retail prices.
(b) Diluted net income (loss) per share is computed assuming the conversion of the company's convertible debentures and notes payable, including the reversal of related interest expense, in the periods where such conversion was dilutive. Prior year periods have been restated for the adoption of SFAS No. 128 (EPS).
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