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Bluegreen Corporation Reports 2011 Fourth Quarter And Full Year Financial Results

Bluegreen Corporation (NYSE: BXG), a leading timeshare sales, marketing and resort management company, today announced financial results for the fourth quarter and full year ended December 31, 2011.

John M. Maloney Jr., President and Chief Executive Officer of Bluegreen, commented, “During 2011, we continued to focus our efforts on growing our fee-based services business. We believe that our results for 2011 reflect our success in leveraging our expertise in areas such as sales and marketing, resort management, title services, mortgage servicing, and construction management to support three potential sources of revenue: our traditional timeshare (VOI) business, our fee-based services business, and our finance business.”

Q4 2011 operating highlights included:

  • System-wide sales of VOIs increased to $74.6 million in Q4 2011 from $71.6 million in Q4 2010.
  • In connection with its fee-based services business, Resorts sold $31.3 million of third-party VOIs in Q4 2011, generating sales and marketing commissions of approximately $21.1 million. This compares to sales of $22.8 million of third-party VOIs, which generated sales and marketing commissions of $15.5 million in Q4 2010.
  • Total revenues from fee-based services rose 19.9% to $38.8 million in Q4 2011 from $32.4 million in Q4 2010. As of December 31, 2011, Bluegreen managed 45 timeshare resort properties and hotels compared to 43 as of December 31, 2010; fee-based services contributed an estimated $14.4 million to Resorts operating profit in Q4 2011, compared to an estimated $9.7 million in Q4 2010.
  • Income from continuing operations attributable to Bluegreen shareholders rose to $5.0 million, or $0.16 per diluted share in Q4 2011, compared to a loss from continuing operations of $2.3 million, or $0.07 per diluted share, in Q4 2010. Q4 2010 loss from continuing operations included the impact of a $31.9 million non-cash pre-tax charge to increase the allowance for loan losses on VOI notes receivable generated prior to December 15, 2008 (the date that Bluegreen implemented a FICO® score-based credit underwriting program), partially offset by $14.1 million in lower cost of sales due to the allowance charge and changes in estimated gross profit. Q4 2011 income from continuing operations was impacted by a $3.7 million pre-tax charge to further increase our loan loss reserves, partially offset by a related $0.9 million reduction in cost of sales.
  • The loss from discontinued operations, net of income tax benefit for Q4 2011 was $5.2 million, or $0.16 per diluted share, compared to a loss of $21.4 million, or $0.69 per diluted share, in Q4 2010. The results of operations of Bluegreen Communities constitute discontinued operations as a result of the agreement to sell Bluegreen Communities to Southstar.
  • As a result of the above-referenced items, net loss for Q4 2011 was $0.1 million, or $0.00 per diluted share, compared to a net loss of $23.7 million, or $0.76 per diluted share, in Q4 2010.

BLUEGREEN RESORTS

Supplemental Financial Data and Reconciliation of System-Wide Sales of VOIs to GAAP Gross Sales of VOIs

Three Months and Year Ended December 31, 2011 and 2010

(In 000’s, except percentages)

   
Three Months Ended December 31, 2011 Three Months Ended December 31, 2010
(Unaudited) (Unaudited)

Traditional

Timeshare

Business

 

Fee-Based  Services

Business

  Total  

% of

System-

wide sales

of VOIs, net (6)

Traditional

Timeshare

Business

 

Fee-Based Services

Business

  Total  

% of

System-

wide sales

of VOIs, net (6)

System-wide sales of VOIs (1) $43,291 $31,327 $74,618 $48,869 $22,760 $71,629

Change in sales deferred under timeshare accounting rules

1,103 - 1,103 2,478 - 2,478
System-wide sales of VOIs, net (1) 44,394 31,327 75,721 100% 51,347 22,760 74,107 100%
Less: Sales of third-party VOIs   (31,327) (31,327) (41) - (22,760) (22,760) (31)
Gross sales of VOIs 44,394 - 44,394 59 51,347 - 51,347 69

Estimated uncollectible VOI notes receivable (2)

 

(7,854)

 

- (7,854) (18) (36,114) - (36,114) (70)
Sales of VOIs 36,540 - 36,540 48 15,233 - 15,233 21
Cost of VOIs sold (3) (8,457) - (8,457) (23) 3,115 - 3,115 20
Gross profit (3) 28,083 - 28,083 77 18,348 - 18,348 120
Fee-based sales commission revenue - 21,141 21,141 28 - 15,508 15,508 21
Other resort fee-based services revenues - 17,660 17,660 23 - 16,855 16,855 23
Cost of other resort fee-based services (9,476) (9,476) (13) - (9,878) (9,878) (13)
Net carrying cost of VOI inventory (4,469) - (4,469) (6) (1,055) - (1,055) (1)
Selling and marketing expense (4) (18,451) (12,822) (31,273) (41) (24,627) (11,065) (35,692) (48)
Resorts G & A expense (4) (2,974) (2,067) (5,041) (7) (3,864) (1,736) (5,600) (8)
Bluegreen Resorts operating profit (5) $2,189 $14,436 $16,625 22% ($11,198) $9,684 ($1,514) (2%)
  Year Ended December 31, 2011   Year Ended December 31, 2010

Traditional

Timeshare

Business

 

Fee-Based Services

Business

  Total  

% of

System-

wide sales

of VOIs, net (6)

Traditional

Timeshare

Business

 

Fee-Based Services

Business

  Total  

% of

System-

wide sales

of VOIs, net (6)

System-wide sales of VOIs (1) $194,046 $109,171 $303,217 $217,054 $78,805 $295,859

Change in sales deferred under timeshare accounting rules

(537) - (537) 818 - 818
System-wide sales of VOIs, net (1) 193,509 109,171 302,680 100% 217,872 78,805 296,677 100%
Less: Sales of third-party VOIs - (109,171) (109,171) (36) - (78,805) (78,805) (27)
Gross sales of VOIs 193,509 - 193,509 64 217,872 - 217,872 73

Estimated uncollectible VOI notes receivable (2)

 

(29,374) - (29,374) (15) (94,164) - (94,164) (43)
Sales of VOIs 164,135 - 164,135 54 123,708 - 123,708 42
Cost of VOIs sold (3) (40,460) - (40,460) (25) (29,015) - (29,015) (23)
Gross profit (3) 123,675 - 123,675 75 94,693 - 94,693 77
Fee-based sales commission revenue - 73,673 73,673 24 - 52,966 52,966 18
Other resort fee-based services revenues - 70,985 70,985 23 - 67,036 67,036 23
Cost of other resort fee-based services - (37,762) (37,762) (12) - (35,075) (35,075) (12)
Net carrying cost of VOI inventory (14,332) - (14,332) (5) (8,965) - (8,965) (3)
Selling and marketing expense (4) (86,755) (48,799) (135,554) (45) (100,530) (37,183) (137,713) (46)
Resorts G & A expense (4) (12,356) (6,950) (19,306) (6) (14,664) (5,423) (20,087) (7)
Bluegreen Resorts operating profit (5) $10,232 $51,147 $61,379 20% ($29,466) $42,321 $12,855 4%

(1) Amount for “fee-based services business” represents sales of VOIs made on behalf of third parties, which are transacted as sales of timeshare interests in the Bluegreen Vacation Club and through the same sales and marketing process as the sale of the Company’s VOI inventory included under “traditional timeshare business.”

(2) Percentages for estimated uncollectible VOI notes receivable are calculated as a percentage of gross sales of VOIs.

(3) Percentages for cost of VOIs sold and the associated gross profit are calculated as a percentage of sales of VOIs.

(4) Selling and marketing expenses and Resorts G&A expenses are allocated pro rata based on system-wide sales of VOIs, net.

(5) General and administrative expenses attributable to corporate overhead have been excluded from the table. Corporate general and administrative expenses totaled $12.7 million and $8.2 million for the three months ended December 31, 2011 and 2010, respectively, and $41.2 million and $38.3 million for the year ended December 31, 2011 and 2010, respectively.

(6) Unless otherwise indicated.

System-wide sales of VOIs rose to $74.6 million in Q4 2011 from $71.6 million in Q4 2010, the result of a higher number of sales transactions. Total VOI sales transactions increased to 6,483 in Q4 2011 from 6,125 in Q4 2010, resulting from an increase in the number of sales made on behalf of third parties (fee-based services business), partially offset by a deliberate decrease in Bluegreen-owned VOIs sales transactions (traditional timeshare business). Total prospect tours in Q4 2011 were 39,619 as compared to 38,952 in Q4 2010, with new prospect tours decreasing to 22,063 in Q4 2011 from 22,647 in Q4 2010. Total sale-to-tour conversion ratio in Q4 2011 was 16.4% as compared to 15.7% in Q4 2010, and the new prospect sale-to-tour conversion ratio was 11.3% in Q4 2011 compared to 10.2% in Q4 2010. Average sales price per transaction was $12,299 for Q4 2011 as compared to $11,904 for Q4 2010.

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