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Bluegreen Corporation Reports 2012 Third Quarter Financial Results

Bluegreen Corporation (NYSE: BXG), a leading timeshare sales, marketing and resort management company, today announced financial results for the quarter and nine months ended September 30, 2012.

John M. Maloney Jr., President and Chief Executive Officer of Bluegreen, commented, “We performed well in the third quarter of 2012, as evidenced by growth at both our traditional VOI and fee-based services businesses, as well as increases in sales tours and sale-to-tour conversion ratios. Our fee-based services business represented approximately 39% and 37% of total system-wide VOI sales for the three and nine months ended September 30, 2012, respectively, up from approximately 37% and 34% in the same respective periods last year. In September, we completed the sale of $100 million of investment-grade timeshare loan-backed notes in a term securitization transaction. This transaction allowed us to refinance at a 2.94% fixed interest rate receivables that were previously pledged under certain of our variable-rate credit facilities, and create approximately $60 million of additional availability under existing receivable-backed credit facilities. Through the first nine months of 2012, we generated free cash flow (defined as cash flow from operating and investing activities) of $138.7 million (including $27.8 million of proceeds from the sale of Bluegreen Communities, prior to the payment of $22.7 million of Bluegreen Communities’ debt and related fees) and reduced outstanding debt by approximately $107.3 million.”

Additional Q3 2012 operating highlights included:

  • In connection with its fee-based services business, Resorts sold $41.7 million of third-party VOIs in Q3 2012, generating sales and marketing commissions of approximately $27.8 million. This compares to sales of $34.0 million of third-party VOIs in Q3 2011, which generated sales and marketing commissions of $23.5 million.
  • Total revenues from fee-based services rose 11.6% to $47.2 million in Q3 2012 from $42.3 million in Q3 2011. Fee-based services contributed an estimated $16.5 million to Resorts operating profit in Q3 2012, compared to an estimated $14.5 million in Q3 2011. As of September 30, 2012, Bluegreen managed 46 timeshare resort properties compared to 45 as of September 30, 2011.

BLUEGREEN RESORTS

       
Supplemental Financial Data and Reconciliation of System-Wide Sales of VOIs to GAAP Gross Sales of VOIs
Three and Nine Months Ended September 30, 2012 and 2011
(In 000’s, except percentages) (Unaudited)
 

Three Months Ended September 30, 2012

Three Months Ended September 30, 2011

           

% of

           

% of

Traditional Fee-Based

System-wide

Traditional Fee-Based

System-wide

Timeshare Services

sales of VOIs,

Timeshare Services

sales of VOIs,

Business Business Total

net (6)

Business Business Total

net (6)

System-wide sales of VOI’s (1) $ 67,421 $ 41,698 $ 109,119 56,993 $ 33,983 $ 90,976

 

Change in sales deferred under timeshare

 

accounting rules   (2,095 )   -     (2,095 )   (335 )   -     (335 )

 

System-wide sales of VOIs, net (1) 65,326 41,698 107,024 100 % 56,658 33,983 90,641 100 %

 

Less: Sales of third-party VOIs   -     (41,698 )   (41,698 ) (39 )   -     (33,983 )   (33,983 ) (37 )

 

Gross sales of VOIs 65,326 - 65,326 61 56,658 - 56,658 63

 

Estimated uncollectible VOI

notes receivable (2)

  (8,354 )   -     (8,354 ) (13 )   (10,770 )   -     (10,770 ) (19 )

 

Sales of VOIs 56,972 - 56,972 53 45,888 - 45,888 51

 

Cost of VOIs sold (3)   (12,590 )   -     (12,590 ) (22 )   (11,349 )   -     (11,349 ) (25 )

 

Gross profit (3) 44,382 - 44,382 78 34,539 - 34,539 75

 

Fee-based sales commission revenue - 27,798 27,798 26 - 23,460 23,460 26

 

Other resort fee-based services revenues - 19,401 19,401 18 - 18,838 18,838 21

 

Cost of other resort fee-based services - (9,083 ) (9,083 ) (8 ) - (10,550 ) (10,550 ) (12 )

 

Net carrying cost of VOI inventory (1,333 ) (1,333 ) (1 ) (2,362 ) - (2,362 ) (3 )

 

Selling and marketing expense (4) (30,375 ) (19,388 ) (49,763 ) (46 ) (25,462 ) (15,272 ) (40,734 ) (45 )

 

Resorts G & A expense (4)   (3,441 )   (2,196 )   (5,637 ) (5 )   (3,334 )   (2,000 )   (5,334 ) (6 )

 

Bluegreen Resorts operating profit (5) $ 9,234   $ 16,531   $ 25,765   24 % $ 3,381   $ 14,476   $ 17,857   20

 

 
 
 

Nine Months Ended September 30, 2012

Nine Months Ended September 30, 2011

% of

% of

Traditional Fee-Based

System-wide

Traditional Fee-Based

System-wide

Timeshare Services

sales of VOIs,

Timeshare Services

sales of VOIs,

Business Business Total

net (6)

Business Business Total

net (6)

System-wide sales of VOI’s (1) $ 179,236 $ 100,813 $ 280,049 150,755 $ 77,844 $ 228,599

 

Change in sales deferred under timeshare

 

accounting rules   (6,249 )   -     (6,249 )   (1,639 )   -     (1,639 )

 

System-wide sales of VOIs, net (1) 172,987 100,813 273,800 100 % 149,116 77,844 226,960 100 %

 

Less: Sales of third-party VOIs   -     (100,813 )   (100,813 ) (37 )   -     (77,844 )   (77,844 ) (34 )

 

Gross sales of VOIs 172,987 - 172,987 63 149,116 - 149,116 66

 

Estimated uncollectible VOI

notes receivable (2)

  (21,448 )   -     (21,448 ) (12 )   (21,521 )   -     (21,521 ) (14 )

 

Sales of VOIs 151,539 - 151,539 55 127,595 - 127,595 56

 

Cost of VOIs sold (3)   (31,355 )   -     (31,355 ) (21 )   (32,003 )   -     (32,003 ) (25 )

 

Gross profit (3) 120,184 - 120,184 79 95,592 - 95,592 75

 

Fee-based sales commission revenue - 66,279 66,279 24 - 52,532 52,532 23

 

Other resort fee-based services revenues - 57,091 57,091 21 - 53,325 53,325 23

 

Cost of other resort fee-based services - (28,918 ) (28,918 ) (11 ) - (28,286 ) (28,286 ) (12 )

 

Net carrying cost of VOI inventory (6,435 ) - (6,435 ) (2 ) (9,863 ) - (9,863 ) (4 )

 

Selling and marketing expense (4) (77,937 ) (45,420 ) (123,357 ) (45 ) (68,514 ) (35,767 ) (104,281 ) (46 )

 

Resorts G & A expense (4)   (9,670 )   (5,635 )   (15,305 ) (6 )   (9,372 )   (4,893 )   (14,265 ) (6 )

 

Bluegreen Resorts operating profit (5) $ 26,142   $ 43,397   $ 69,539   25 % $ 7,843   $ 36,911   $ 44,754   20 %

 

 
(1)   Amounts for “Fee-Based Services Business” represent 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 $13.5 million and $9.3 million for the three months ended September 30, 2012 and 2011, respectively, and $38.2 million and $28.5 million for the nine months ended September 30, 2012 and 2011, respectively.
 
(6) Unless otherwise indicated.

System-wide sales of VOIs rose to $109.1 million in Q3 2012 from $91.0 million in Q3 2011. This reflects an increase in the number of total prospect tours (55,825 in Q3 2012 from 48,773 in Q3 2011) along with an improved total sale-to-tour conversion ratio (16.6% in Q3 2012, up from 15.7% in Q3 2011) . Bluegreen also realized a higher average sales price per transaction ($11,976 for Q3 2012 as compared to $11,851 for Q3 2011). New prospect tours, included in total prospect tours above, rose to 33,714 in Q3 2012 from 29,125 in Q3 2011.

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