Bluegreen Corporation Reports 2012 Third Quarter Financial Results

INTEREST INCOME AND INTEREST EXPENSE

Net interest spread is the excess of interest income over interest expense. Pre-tax income from net interest spread in Q3 2012 rose to $10.8 million from $10.3 million in Q3 2011, due to a decrease in interest expense as Bluegreen continues to reduce the level of debt on its balance sheet, partially offset by lower interest income resulting from the continued decline in Bluegreen’s VOI notes receivable portfolio due to both the maturing of the portfolio as well as our efforts to increase cash sales and collect higher down payments on those VOI sales that we do finance.

DISCONTINUED OPERATIONS

Bluegreen Communities, which is reported as discontinued operations in all periods presented, marketed residential homesites, the majority of which were sold directly to retail customers seeking to build a home generally in the future, and operated daily-fee golf courses. As previously announced, on May 4, 2012, substantially all of the assets which comprised Bluegreen Communities were sold to Southstar for a purchase price of $29.0 million in cash, the majority of which was used to pay outstanding debt which was collateralized by the Bluegreen Communities assets sold in the transaction. Bluegreen may also receive certain contingent consideration based on Southstar’s sale, if any, of two properties sold to Southstar as part of the transaction. Certain assets relating to Bluegreen Communities, including primarily Bluegreen Communities’ notes receivable portfolio, were excluded from the sale.

ABOUT BLUEGREEN CORPORATION

Founded in 1966 and headquartered in Boca Raton, FL, Bluegreen Corporation (NYSE:BXG) is a leading timeshare sales, marketing and resort management company. Bluegreen manages, markets and sells the Bluegreen Vacation Club, a flexible, points-based, deeded vacation ownership plan with more than 160,000 owners, over 59 owned or managed resorts, and access to more than 4,000 resorts worldwide. Bluegreen also offers a portfolio of comprehensive, turnkey, fee-based service resort management, financial services, and sales and marketing on behalf of third parties. For more information, visit www.bluegreencorp.com.

Statements in this release may constitute forward-looking statements and are made pursuant to the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. Forward looking statements are based largely on expectations and are subject to a number of risks and uncertainties including, but not limited to, the risks and uncertainties associated with economic, credit market, competitive and other factors affecting the Company and its operations, markets, products and services; the Company’s efforts to improve its liquidity through cash sales and larger down payments on financed sales may not be successful; the performance of the Company’s VOI notes receivable may deteriorate, and the FICO ^® score-based credit underwriting standards may not have the expected effects on the performance of the receivables; the Company may not be in a position to draw down on its existing credit lines or may be unable to renew, extend, or replace such lines of credit; the Company may require new credit lines to provide liquidity for its operations, including facilities to sell or finance its notes receivable; the Company may not be able to successfully securitize additional timeshare loans and/or obtain adequate receivable credit facilities in the future; risks relating to pending or future litigation, regulatory proceedings, claims and assessments; sales and marketing strategies may not be successful; marketing costs may increase and not result in increased sales; system-wide sales, including sales on behalf of third parties and sales to existing owners, may not continue at current levels or they may decrease; fee-based service initiatives may not be successful and may not grow or generate profits as anticipated; POA Sales may not continue at current levels or may decrease, and we may not be successful in our efforts to enter into similar arrangements with third-party developers in connection with our fee-based services business; risks related to other financial trends discussed in this press release, including that the volume of tours and the sale-to-tour conversion ratio may not continue at current levels or decrease, the Company may be required to further increase its allowance for loan losses in the future and record additional impairment charges as a result of any such increase; selling and marketing expenses as a percentage of system-wide sales of VOIs, net may not remain at current levels or they may increase; and the Company’s indebtedness may increase in the future; and the risks and other factors detailed in the Company’s SEC filings, including those contained in the “Risk Factors” sections of such filings.

Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)
(In 000's, except per share data)
(Unaudited)
				For the Three Months Ended												For the Nine Months Ended
				September 30,												September 30,
					2012						2011						2012						2011
Revenues:
Gross sales of VOI				$	65,326					$	56,658					$	172,987					$	149,116
Estimated uncollectible VOI notes receivable					(8,354	)					(10,770	)					(21,448	)					(21,521	)
Sales of VOIs					56,972						45,888						151,539						127,595
Fee-based sales commission revenue					27,798						23,460						66,279						52,532
Other fee-based services revenue					19,401						18,838						57,091						53,325
Interest income					21,485						23,533						65,051						71,986
Other income, net					377						-						759						-
					126,033						111,719						340,719						305,438
Costs and expenses:
Cost of VOIs sold					12,590						11,349						31,355						32,003
Cost of other resort fee-based services					10,416						12,912						35,353						38,149
Selling, general and administrative expenses					69,482						56,098						178,845						149,448
Interest expense					10,651						13,225						33,074						41,746
Other expense, net					-						-						-						910
					103,139						93,584						278,627						262,256
Income before non-controlling interest, provision for income taxes, and
discontinued operations					22,894						18,135						62,092						43,182
Provision for income taxes					8,149						5,939						21,960						14,650
Income from continuing operations					14,745						12,196						40,132						28,532
Loss from discontinued operations, net of income taxes					(347	)					(2,626	)					(2,043	)					(40,389	)
Net income (loss)					14,398						9,570						38,089						(11,857	)
Less: Net income attributable to non-controlling interest					2,738						2,520						7,519						5,261
Net income (loss) attributable to Bluegreen Corporation				$	11,660					$	7,050					$	30,570					$	(17,118	)
Income (loss) attributable to Bluegreen Corporation per common share - Basic
Earnings per share from continuing operations attributable to
Bluegreen shareholders				$	0.38					$	0.31					$	1.04					$	0.75
Loss per share from discontinued operations					(0.01	)					(0.08	)					(0.07	)					(1.29	)
Earnings (loss) per share attributable to Bluegreen shareholders				$	0.37					$	0.23					$	0.98					$	(0.55	)
Income (Loss) attributable to Bluegreen Corporation per common share - Diluted
Earnings per share from continuing operations attributable to
Bluegreen shareholders				$	0.38					$	0.30					$	1.03					$	0.71
Loss per share from discontinued operations					(0.01	)					(0.08	)					(0.06	)					(1.26	)
Earnings (loss) per share attributable to Bluegreen shareholders				$	0.37					$	0.22					$	0.97					$	(0.53	)
Weighted average number of common shares:
Basic					31,347						31,245						31,288						31,211
Diluted					31,605						32,429						31,554						32,156
Comprehensive income (loss) attributable to Bluegreen Corporation				$	11,660					$	7,050					$	30,570					$	(17,118	)

Condensed Consolidated Balance Sheets
(In 000's, except per share data)
				September 30,					December 31,
				2012					2011
ASSETS				(Unaudited)
Unrestricted cash and cash equivalents				$	100,236				$	80,931
Restricted cash ($35,876 and $38,913 in VIEs at September 30, 2012
and December 31, 2011, respectively)					60,148					51,125
Notes receivable, net ($370,121 and $375,904 in VIEs
at September 30, 2012 and December 31, 2011, respectively)					489,440					512,517
Inventory					280,569					302,843
Prepaid expenses					8,563					4,120
Other assets					52,901					47,100
Property and equipment, net					69,157					70,112
Assets held for sale					—					28,625
Total assets				$	1,061,014				$	1,097,373
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable				$	10,908				$	8,834
Accrued liabilities and other					73,811					62,878
Deferred income					30,304					24,549
Deferred income taxes					35,546					15,776
Receivable-backed notes payable - recourse ($11,511 and $15,826 in
VIEs at September 30, 2012 and December 31, 2011, respectively)					65,063					110,016
Receivable-backed notes payable - non-recourse (in VIEs)					373,385					369,314
Lines-of-credit and notes payable					20,396					86,817
Junior subordinated debentures					110,827					110,827
Total liabilities					720,240				$	789,011
Shareholders' Equity
Preferred stock, $.01 par value, 1,000 shares authorized; none issued					—					—
Common stock, $.01 par value, 140,000 shares authorized;
31,349 and 31,288 shares issued at September 30, 2012 and December 31, 2011, respectively					313					313
Additional paid-in capital					193,672					191,999
Retained earnings					107,588					77,018
Total Bluegreen Corporation shareholders' equity					301,573					269,330
Non-controlling interest					39,201					39,032
Total shareholders’ equity					340,774					308,362
Total liabilities and shareholders' equity				$	1,061,014				$	1,097,373

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