Bluegreen Vacations Holding Corporation (NYSE: BVH) (OTCQX:
BVHBB) (the “Company" or “Bluegreen”) reported today its financial
results for the quarter ended September 30, 2023.
Key Highlights as of and for the
Quarter Ended September 30, 2023:
- Net income attributable to shareholders decreased 10% to $20.7
million from $23.0 million in the prior year quarter.
- Diluted Earnings Per Share (“EPS”) increased 5% to $1.25 from
$1.19 in the prior year quarter.
- Total revenue increased 7% to $267.9 million from $250.8
million in the prior year quarter.
- System-wide sales of vacation ownership interests (“VOIs”)
increased 4% to $216.1 million from $206.9 million in the prior
year quarter. (1)
- Number of guest tours were 69,524 compared to 69,490 in the
prior year quarter.
- Vacation packages sold increased 13% to 45,919 compared to
40,595 in the prior year quarter.
- Vacation packages outstanding of 162,532 as of September 30,
2023, compared to 165,240 as of December 31, 2022 and 169,950
outstanding as of September 30, 2022.
- Adjusted EBITDA attributable to shareholders increased 2% to
$42.6 million from $41.9 million in the prior year quarter.
(2)
Key Highlights as of and for the Nine
Months Ended September 30, 2023:
- Net income attributable to shareholders decreased 5% to $54.1
million from $56.7 million in the prior year period.
- Diluted EPS increased 18% to $3.31 from $2.81 in the prior year
period.
- Total revenue increased 10% to $747.6 million from $681.5
million in the prior year period.
- System-wide sales of VOIs increased 5% to $583.7 million from
$556.9 million in the prior year period.(1)
- Number of guest tours increased 2% to 188,207 from 184,816 in
the prior year period.
- Vacation packages sold increased 9% to 133,813 compared to
122,980 in the prior year period.
- Adjusted EBITDA attributable to shareholders increased 5% to
$113.4 million from $107.6 million in the prior year
period.(2)
- Free cash flow was an outflow of $73.9 million in the nine
months ended September 30, 2023, compared to an inflow of $59.3
million for the nine months ended September 30, 2022, primarily as
a result of the acquisition and development of real estate, an
increase in VOI notes receivable originations and timing of changes
in working capital.(3)
(1)
See appendix for reconciliation of
system-wides sales of VOIs to gross sales of VOIs for each
respective period.
(2)
See appendix for reconciliation of
Adjusted EBITDA attributable to shareholders to net income
attributable to shareholders for each respective period.
(3)
See appendix for reconciliation of free
cash flow to net cash provided by operating activities.
Financial
Results
(dollars in millions, except per guest and
per transaction amounts)
Three Months Ended September
30,
Q3 2023 vs Q3 2022
Nine Months Ended September
30,
YTD 2023 vs YTD 2022
2023
2022
% Change
2023
2022
% Change
Total revenue
$
267.9
$
250.8
7
%
$
747.6
$
681.5
10
%
Income before non-controlling
interest and provision for income taxes
$
33.3
$
36.2
(8)
%
$
87.7
$
89.6
(2)
%
Adjusted EBITDA Attributable to
shareholders (1)
$
42.6
$
41.9
2
%
$
113.4
$
107.6
5
%
(1)
See Appendix for reconciliation of
Bluegreen’s Adjusted EBITDA Attributable to shareholders to Net
Income Attributable to shareholders.
Adjusted EBITDA Attributable to Shareholders was $42.6 million
for the quarter ended September 30, 2023, including $47.0 million
generated by the Sales of VOIs and Financing Segment and $22.6
million produced by the Resort Operations and Club Management
segment, partially offset by $22.2 million of corporate overhead
and other expenses and $4.9 million of Adjusted EBITDA attributable
to a third-party non-controlling interest in Bluegreen/Big Cedar
Vacations LLC. Please see the discussion of Segment Results below
for further information.
Adjusted EBITDA Attributable to Shareholders was $113.4 million
for the nine months ended September 30, 2023, including $123.1
million generated by the Sales of VOIs and Financing Segment and
$68.4 million produced by the Resort Operations and Club Management
segment, partially offset by $64.6 million of corporate overhead
and other expenses and $13.4 million of Adjusted EBITDA
attributable to a third-party non-controlling interest in
Bluegreen/Big Cedar Vacations LLC. Please see the discussion of
Segment Results below for further information.
Sales of VOIs and Financing
Segment
(dollars in millions, except per guest and
per transaction amounts)
Three Months Ended September
30,
Q3 2023 vs Q3 2022
Nine Months Ended September
30,
YTD 2023 vs YTD 2022
2023
2022
% Change
2023
2023
% Change
System-wide sales of VOIs
$
216.1
$
206.9
4
%
$
583.7
$
556.9
5
%
Segment adjusted EBITDA
$
47.0
$
44.0
7
%
$
123.1
$
117.1
5
%
Financing revenue, net of financing
expense
$
22.2
$
20.7
7
%
$
64.8
$
58.7
10
%
Key Data Regarding
Bluegreen’s System-wide sales of VOIs
Three Months Ended September
30,
Q3 2023 vs Q3 2022
Nine Months Ended September
30,
YTD 2023 vs YTD 2022
2023
2022
% Change
2023
2022
% Change
System-wide sales of VOIs
$
216.1
$
206.9
4
%
$
583.7
$
556.9
5
%
Number of total guest tours
69,524
69,490
—
%
188,207
184,816
2
%
Average sales price per transaction
$
22,077
$
20,771
6
%
$
21,814
$
20,545
6
%
Sales to tour conversion ratio
14%
15%
(100)
bp
14%
15%
(100)
bp
Sales volume per guest ("VPG")
$
3,131
$
3,005
4
%
$
3,115
$
3,036
3
%
Selling and marketing expenses, as a % of
system-wide sales of VOIs
54%
56%
(200)
bp
54%
56%
(200)
bp
Provision for loan losses
17%
17%
—
bp
17%
16%
100
bp
Cost of VOIs sold
13%
10%
300
bp
12%
11%
100
bp
System-wide sales of VOIs increased 4% to $216.1 million during
the three months ended September 30, 2023 from $206.9 million for
the three months ended September 30, 2022. Sales volume per guest,
or VPG, increased 4% in the 2023 third quarter compared to the 2022
third quarter, while the number of guest tours was approximately
the same between the quarters. The VPG performance in the third
quarter of 2023 was the result of our focus on increasing the
proportion of tours by owners and higher VPGs for both existing
owners and new customers. The increase in VPG overall reflects a 6%
increase in average sales price per transaction, partially offset
by a 100 basis-point decrease in the sale-to-tour conversion rate
as Bluegreen continued to focus on larger transaction sizes.
System-wide sales of VOIs increased 5% to $583.7 million during
the nine months ended September 30, 2023 from $556.9 million for
the nine months ended September 30, 2022. The number of guest tours
was 2% higher, while VPG increased 3% in the nine months ended
September 30, 2023, as compared to the nine months ended September
30, 2022. The VPG performance in the nine months ended September
30, 2023 was also a result of our focus on increasing the
proportion of tours by owners and higher VPGs for both existing
owners and new customers. This increase in VPG overall reflects a
6% increase in average sales price per transaction, partially
offset by a 100 basis-point decrease in the sale-to-tour conversion
rate.
Fee-based Sales Commission
Revenue
VOI sales of third-party inventory, for which we earn a
commission, represented 11% of System-wide Sales of VOIs during
both the three and nine months ended September 30, 2023. Fee-based
sales commission revenue on such sales was $15.7 million and $41.3
million during the three and nine months ended September 30, 2023,
respectively, which represented a commission rate of approximately
66% during both periods.
VOI sales of third-party inventory, for which we earn a
commission, are expected to be between 8% and 12% of system-wide
sales of VOIs for the fourth quarter of 2023.
Provision for Loan Losses
The provision for loan losses as a percentage of gross sales of
VOIs was approximately 17% during both the third quarter of 2023
and the third quarter of 2022. The provision for loan losses as a
percentage of gross sales of VOIs was approximately 17% during the
nine months ended September 30, 2023, and 16% during the nine
months ended September 30, 2022. The increase in the provision for
loan losses as a percentage of gross sales of VOIs during the nine
months ended September 2023 as compared to the comparable prior
year period is primarily a result of a higher proportion of VOI
sales that were financed by us, as we actively seek to grow our VOI
notes receivable portfolio to generate additional interest
income.
The provision for loan losses is expected to be between 16% and
18% of gross sales of VOIs for the fourth quarter of 2023.
Cost of VOIs Sold
Cost of VOIs sold represented 13% and 10% of sales of VOIs in
the third quarters of 2023 and 2022, respectively, and 12% and 11%
of sales of VOIs during the nine months ended September 30, 2023
and 2022, respectively. Cost of VOIs sold as a percentage of sales
of VOIs was higher for the three and nine months ended September
30, 2023 as compared to the three and nine months ended September
30, 2022 primarily due to the relative mix of inventory being sold,
partially offset by the timing of secondary market purchases and
the timing of the reinstatement of certain equity trade programs in
2022.
Cost of VOIs sold is expected to be between 11% and 13% of sales
of VOIs for the fourth quarter of 2023.
Net Carrying Cost of Inventory
The net carrying cost of inventory decreased 39% to $3.0 million
in the third quarter of 2023 from $4.9 million in the third quarter
of 2022. The net carrying cost of inventory decreased 2% to $12.7
million for the nine months ended September 30, 2023, from $13.0
million for the nine months ended September 30, 2022. The decrease
in net carrying cost of inventory reflects lower maintenance fees
paid by Bluegreen and higher marketing use of inventory, partially
offset by higher developer subsidies paid by Bluegreen, lower
rental revenue and lower sampler revenue. Recent and planned
acquisitions of VOI inventory are expected to increase developer
subsidies in the near future.
Selling and Marketing Expenses
Three Months Ended September
30,
Q3 2023 vs Q3 2022
Nine Months Ended September
30,
YTD 2023 vs YTD 2022
2023
2022
% Change
2023
2023
% Change
Selling and marketing expenses,
as a % of system-wide sales of VOIs
54%
56%
(200)
bp
54%
56%
(200)
bp
Percentage of sales of VOIs to
new customers
45%
48%
(300)
bp
43%
46%
(300)
bp
Number of Bass Pro and Cabela's
marketing locations (1)
130
128
2
%
130
128
2
%
Number of total guest tours
69,524
69,490
—
%
188,207
184,816
2
%
Number of vacation packages
sold
45,919
40,595
13
%
133,813
122,980
9
%
Number of vacation packages
outstanding, end of the period (2)
162,532
169,950
(4)
%
162,532
169,950
(4)
%
(1)
As of January 1, 2023, 23 of our Cabela’s
marketing locations were converted to unmanned, virtual kiosks, 4
of which were restaffed during the nine months ended September 30,
2023.
(2)
Excludes vacation packages sold to
customers more than one year prior to the period presented and
vacation packages sold to customers who had already toured and
purchased VOIs.
Selling and marketing expenses decreased 1% to $115.8 million in
the third quarter of 2023 compared to $116.5 million in the third
quarter of 2022, despite the 4% increase in system-wide sales
during the 2023 quarter compared to the 2022 quarter. As a
percentage of system-wide sales, selling and marketing expenses
decreased to 54% in the third quarter of 2023 compared to 56% in
the third quarter of 2022. The decrease in selling and marketing
expenses as a percentage of system-wide sales was driven by
decreases in our marketing costs and sales commissions expense and
a higher proportion of sales to existing owners, which are
generally more profitable than sales to new customers. Sales to
existing owners increased to 55% of system-wide sales in the third
quarter of 2023 from 52% in the third quarter of 2022.
Selling and marketing expenses increased 1% to $314.9 million
for the nine months ended September 30, 2023, compared to $312.9
million for the nine months ended September 30, 2022, primarily
driven by the 5% increase in system-wide sales during the 2023
period compared to the 2022 period. As a percentage of system-wide
sales, selling and marketing expenses decreased to 54% for the nine
months ended September 30, 2023, compared to 56% for the nine
months ended September 30, 2022. The decrease in selling and
marketing expenses as a percentage of system-wide sales was driven
by decreases in our marketing cost and sales commissions expense,
both as a percentage of system-wide sales. Sales to existing
owners, which are generally more profitable than sales to new
customers, increased to 57% of system-wide sales for the nine
months ended September 30, 2023, from 54% for the nine months ended
September 30, 2022.
Marketing expense decreased during the 2023 periods as a result
of the previously disclosed transition of kiosks at certain
Cabela’s stores to an unmanned, virtual format and exited certain
kiosks at malls as of January 1, 2023. The operation of fewer
locations lowered overall costs and allowed Bluegreen to focus on
higher producing locations. As a result, even with fewer locations,
Bluegreen increased the number of vacation packages sold in the
third quarter and the first nine months of 2023 by 13% and 9%,
respectively, over the prior periods. The active pipeline of
vacation packages decreased to 162,532 at September 30, 2023 from
169,950 at September 30, 2022 based on vacation packages used or
expired, net of new vacation package sales. During the second,
third and fourth quarters of 2022, Bluegreen reorganized its retail
marketing operations, which reduced temporarily reduced its package
sales and hence its pipeline of vacation packages. While there is
no assurance that this will continue to be the case, historically,
approximately 40%-42% of vacation packages resulted in guest tours
at one of Bluegreen’s resorts with a sales center within twelve
months of purchase. In addition to this active pipeline, Bluegreen
also has a pipeline of approximately 17,270 vacation packages held
by customers who already toured and purchased a VOI who have
indicated they would tour again.
Selling and marketing expenses are expected to be between 50%
and 53% as a percentage of system-wide sales for the fourth quarter
of 2023.
General & Administrative Expenses from
Sales & Marketing Operations
General and administrative expenses representing expenses
directly attributable to sales and marketing operations increased
8% to $14.5 million during the third quarter of 2023 from $13.4
million during the third quarter of 2022 and increased 10% to $41.0
million during the nine months ended September 30, 2023 from $37.4
million during the nine months ended September 30, 2022. As a
percentage of system-wide sales of VOIs, general and administrative
expenses attributable to sales and marketing operations were 7% and
6% during the third quarter of 2023 and 2022, respectively, and 7%
during each of the nine months ended September 30, 2023 and
2022.
General and administrative expenses representing expenses
directly attributable to sales and marketing operations (including
sales leadership, support and regional offices) are expected to be
between 6% and 8% of system-wide sales for the fourth quarter of
2023.
Financing Revenue and Financing
Expense
Interest income on VOI notes receivable increased 23% to $31.4
million in the third quarter of 2023 compared to $25.5 million in
the third quarter of 2022. Interest income on VOI notes receivable
increased 25% to $88.6 million for the nine months ended September
30, 2023, compared to $71.0 million for the nine months ended
September 30, 2022. The increase in interest income on VOI notes
receivable reflects a higher balance of VOI notes receivable due to
continued VOI sales growth and our efforts to increase the amount
of VOI sales that we finance.
Interest expense on receivable-backed notes payable increased
92% to $9.2 million in the third quarter of 2023 compared to $4.8
million in the third quarter of 2022. Interest expense on
receivable-backed notes payable increased 93% to $23.8 million for
the nine months ended September 30, 2023, compared to $12.3 million
for the nine months ended September 30, 2022. The increase in
interest expense on receivable-backed notes payable reflect higher
outstanding receivable-backed notes payable and an increased
weighted-average cost of borrowing, associated with increases in
interest rates. As of September 30, 2023, receivable-backed notes
payable was $575.1 million and the average interest rate on such
borrowings was 6.1% compared to $370.1 million and 4.3% as of
September 30, 2022.
Resort Operations and Club Management
Segment
(dollars in millions)
Three Months Ended September
30,
Q3 2023 vs Q3 2022
Nine Months Ended September
30,
YTD 2023 vs YTD 2022
2023
2022
% Change
2023
2022
% Change
Resort operations and club management
revenue
$
55.6
$
51.6
8
%
$
166.3
$
143.3
16
%
Segment adjusted EBITDA
$
22.6
$
21.9
3
%
$
68.4
$
63.4
8
%
Managed Club Resorts and Club
Associate Resorts
53
50
6
%
53
50
6
%
The increases in Resort operations and club management revenue
and Adjusted EBITDA in the three and nine months ended September
30, 2023 compared to the comparable prior year periods, primarily
reflect an increase in management fees, higher reimbursed HOA
resort operating costs and three additional resort management
contracts.
Corporate Overhead, Administrative Expenses, Interest Expense
and Other
Corporate General and Administrative
Expenses
Corporate general and administrative expenses increased 14% to
$25.5 million during the third quarter of 2023 from $22.3 million
during the third quarter of 2022. Corporate general and
administrative expenses increased 11% to $77.9 million during the
nine months ended September 30, 2023, from $69.9 million during the
nine months ended September 30, 2022. The increases in expenses
during the 2023 periods as compared to the 2022 periods were
primarily associated with higher compensation, legal fees, and
medical and other insurance costs.
Interest Expense
Interest expense not related to receivable-backed debt was $10.2
million and $6.1 million during the third quarters of 2023 and
2022, respectively, and $29.9 million and $16.7 million during the
nine months ended September 30, 2023 and 2022, respectively. These
increases were primarily due to an increase in outstanding debt and
a higher weighted-average cost of borrowing due to increased
interest rates in the 2023 periods.
Announced Merger Agreement with Hilton Grand
Vacations
On November 5, 2023, the Company entered into a merger agreement
with Hilton Grand Vacations Inc. (“HGV”), pursuant to which HGV
agreed to acquire the Company in an all-cash transaction. Subject
to the terms and conditions of the merger agreement, upon the
consummation of the transaction, HGV will acquire all of the shares
of Bluegreen for $75.00 per share, representing a total enterprise
value of approximately $1.5 billion, inclusive of net debt. As of
September 30, 2023, approximately $0.5 million of transaction costs
have been incurred related to the transaction and are included in
Corporate General and Administrative Expenses. Closing of the
transaction is subject to the approval of the Company’s
stockholders and other customary closing conditions, including
regulatory approvals. Subject to the satisfaction of the closing
conditions, the transaction is expected to close during the first
half of 2024.
Additional Information
For more complete and detailed information regarding the Company
and its financial results, please see the Company’s Annual Report
on Form 10-K for the year ended December 31, 2022, which was filed
with the SEC on March 13, 2023, and its Quarterly Report on Form
10- Q for the three months ended September 30, 2023, which is
expected to be filed with the SEC on or about November 6, 2023, and
will be available on the SEC's website, https://www.sec.gov, and on
the Company’s website, www.BVHCorp.com.
Non-GAAP Financial
Measures
The Company refers to certain non-GAAP financial measures in
this press release, including EBITDA, Adjusted EBITDA, System-wide
Sales of VOIs, and Free Cash Flow. Please see the supplemental
tables herein for how these terms are defined and for
reconciliations of such measures to the most comparable GAAP
financial measures.
About Bluegreen
Vacations:
Bluegreen Vacations Holding Corporation (NYSE: BVH; OTCQX:
BVHBB) is a leading vacation ownership company that markets and
sells vacation ownership interests and manages resorts in popular
leisure and urban destinations. The Bluegreen Vacation Club is a
flexible, points-based, deeded vacation ownership plan with 73 Club
and Club Associate Resorts and access to nearly 11,600 other hotels
and resorts through partnerships and exchange networks.
For further information, please visit
us at:
Bluegreen Vacations Holding Corporation: www.BVHCorp.com
Forward Looking
Statements
Certain statements in this press release are "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements, other than statements of
historical fact, are forward-looking statements. Forward-looking
statements are based on current expectations of management and can
be identified by the use of words such as “believe”, “may”,
“could”, “should”, “plans”, “anticipates”, “intends”, “estimates”,
“expects”, and other words and phrases of similar import.
Forward-looking statements involve risks, uncertainties, and other
factors, many of which are beyond our control, that may cause
actual results or performance to differ from those set forth or
implied in the forward-looking statements. These risks and
uncertainties include, without limitation, the risk that the
Company is a holding company and, accordingly, will be largely
dependent on dividends from Bluegreen to fund its expenses and
obligations in future periods, and Bluegreen’s ability to pay
dividends will depend on its results and may be limited by the
terms of Bluegreen’s indebtedness; risks relating to Bluegreen’s
business, operations, financial results, business strategy and
prospects; risks related to general economic conditions, including
increasing interest rates, inflationary trends, a potential
recession and supply chain issues, and our ability to successfully
navigate any adverse condition; risk that the level of cash may not
be adequate in the event of a deep and/or prolonged downturn,
competitive conditions; labor market conditions, including costs
and shortages of labor, and its impact on Bluegreen’s operations
and sales; risks related to changes made to our vacation package
programs and their impact on sales, including that the goal of
improving the efficiency of Bluegreen’s marketing expenditures may
not result in the benefits anticipated; risks related to our
investments in sales and marketing efforts and infrastructure,
including their impact on our cash flow and the risk that they may
not result in the benefits anticipated; risks related to resort
acquisitions and our pursuit of acquisition and development
opportunities, including that acquired resorts may not open when
planned, the costs and risks of development and renovation
activities, including potential construction delays and
environmental issues may be greater than anticipated, that we may
not be successful in identifying or consummating acquisition or
development opportunities in the future, and that acquired or
developed resorts may not be successfully operated or result in the
benefits anticipated; risks relating to our liquidity and the
availability of capital;, that the Company may not realize the
benefits of its securitizations to the extent anticipated or at
all, and that the Company’s receivable loan portfolio won’t perform
as anticipated; the risk that our allowance for loan losses may not
be adequate and, accordingly, may need to be increased in the
future, the risk that Bluegreen’s default rates will increase and
exceed expectations; risks related to Bluegreen’s efforts to
address the actions of timeshare exit firms and the increase in
default rates associated therewith are not successful, or
otherwise; risks related to our indebtedness, including the
potential for accelerated maturities and debt covenant violations;
the impact of public health and general economic conditions,
including inflation, on Bluegreen’s consumers, including their
income and level of discretionary spending, and on consumer traffic
at retail locations; the risk that our core strategy of primarily
offering a ‘drive-to’ network of resorts will not continue to serve
as a growth driver; the risk that resort operations and club
management segment may not continue to produce recurring EBITDA and
free cash flow; risks that Bluegreen’s current or future marketing
alliances and arrangements, including its marketing arrangements
with Bass Pro, NASCAR and the Choice Hotels program, may not be
renewed and will expire pursuant to their terms and may not be
profitable; the risk that vacation package sales, including those
in the pipeline, may not convert to tours and/or VOI sales at
anticipated or historical rates; the risk that resort occupancies
may not continue at current or historical levels or meet
expectations; our ability to successfully implement strategic plans
and initiatives, generate earnings and long-term growth may not
result in increased sales, revenues or efficiencies, or otherwise
be successful; risks that construction defects, structural failures
or natural disasters at or in proximity to Bluegreen’s resort;
risks related to expansion of the resort network in existing and to
new locations, including that such expansion may not be successful
and may increase the Company’s debt and decrease the Company’s free
cash flow; risks related to the mix of sales to new customers and
existing owners, including that the level of sales to new customers
may not be maintained, or support net owner growth in the future;
risks regarding the amount of shares, if any, which may be
repurchased by the Company in the future, the benefits to the
Company, if any, of repurchasing shares, the timing of any share
repurchases, and the availability of funds for the repurchase of
shares; the risk that quarterly dividend payments may not be
declared at the current level in the future, on a regular basis as
anticipated, or at all; and the additional risks and uncertainties
described in the Company's filings with the SEC, including, without
limitation, the Company’s Annual Report on Form 10-K for the year
ended December 31, 2022 (including the “Risk Factors” section
thereof), which was filed on March 13, 2023, and the Company’s
Quarterly Report on Form 10-Q for the three months ended September
30, 2023, which is expected to be filed on November 6, 2023. The
Company cautions that the foregoing factors are not exclusive. You
should not place undue reliance on any forward-looking statement,
which speaks only as of the date made. The Company does not
undertake, and specifically disclaims any obligation, to update or
supplement any forward-looking statements. In addition, past
performance may not be indicative of future results.
BLUEGREEN VACATIONS HOLDING
CORPORATION
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
September 30,
December 31,
2023
2022
ASSETS
Cash and cash equivalents
$
134,881
$
175,683
Restricted cash ($25,845 and $19,461 in
VIEs at September 30, 2023
and December 31, 2022, respectively)
55,304
50,845
Notes receivable
908,612
763,801
Less: Allowance for loan losses
(232,360
)
(211,311
)
Notes receivable, net ($439,783 and
$354,403 in VIEs
at September 30, 2023 and December 31,
2022, respectively)
676,252
552,490
Vacation ownership interest ("VOI")
inventory
449,889
389,864
Property and equipment, net
88,496
85,915
Intangible assets
61,293
61,293
Operating lease assets
20,401
22,963
Prepaid expenses
17,717
23,833
Other assets
35,699
35,499
Total assets
$
1,539,932
$
1,398,385
LIABILITIES AND EQUITY
Liabilities
Accounts payable
$
25,797
$
21,389
Deferred income
18,877
15,675
Accrued liabilities and other
122,451
110,048
Receivable-backed notes payable -
recourse
14,633
20,841
Receivable-backed notes payable -
non-recourse (in VIEs)
560,491
440,781
Note payable to BBX Capital, Inc.
35,000
50,000
Note payable and other borrowings
169,164
218,738
Junior subordinated debentures
136,892
136,011
Operating lease liabilities
24,891
27,716
Deferred income taxes
125,991
113,193
Total liabilities
1,234,187
1,154,392
Commitments and Contingencies - See Note
9
Equity
Preferred stock of $0.01 par value;
authorized 10,000,000 shares
—
—
Class A Common Stock of $0.01 par value;
authorized 30,000,000 shares;
issued and outstanding 12,204,198 in 2023
and 12,165,825 in 2022
122
122
Class B Common Stock of $0.01 par value;
authorized 4,000,000 shares;
issued and outstanding 3,664,117 in 2023
and 2022
37
37
Additional paid-in capital
51,443
46,821
Accumulated earnings
168,526
124,680
Total Bluegreen Vacations Holding
Corporation equity
220,128
171,660
Non-controlling interest
85,617
72,333
Total equity
305,745
243,993
Total liabilities and equity
$
1,539,932
$
1,398,385
BLUEGREEN VACATIONS HOLDING
CORPORATION
CONSOLIDATED STATEMENTS OF
INCOME AND COMPREHENSIVE INCOME
(In thousands, except share
data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Revenue:
Gross sales of VOIs
$
192,213
$
185,902
$
520,758
$
472,295
Provision for loan losses
(32,880
)
(30,684
)
(87,451
)
(73,789
)
Sales of VOIs
159,333
155,218
433,307
398,506
Fee-based sales commission revenue
15,694
14,241
41,266
57,174
Other fee-based services revenue
36,642
34,559
105,987
98,553
Cost reimbursements
23,292
20,719
70,960
54,950
Interest income
32,976
25,803
92,762
71,506
Other income, net
—
296
3,278
774
Total revenues
267,937
250,836
747,560
681,463
Costs and Expenses:
Cost of VOIs sold
20,184
14,805
52,902
44,868
Cost of other fee-based services
15,022
15,377
46,269
41,732
Cost reimbursements
23,292
20,719
70,961
54,951
Interest expense
19,458
10,822
53,670
28,935
Selling, general and administrative
expenses
156,581
152,881
436,067
421,339
Other expense, net
63
—
—
—
Total costs and expenses
234,600
214,604
659,869
591,825
Income before income taxes
33,337
36,232
87,691
89,638
Provision for income taxes
(7,840
)
(8,586
)
(20,338
)
(20,948
)
Net income
25,497
27,646
67,353
68,690
Less: Income attributable to
noncontrolling interest
4,840
4,682
13,284
11,954
Net income attributable to
shareholders
$
20,657
$
22,964
$
54,069
$
56,736
Comprehensive income attributable to
shareholders
$
20,657
$
22,964
$
54,069
$
56,736
Basic earnings per share (1)
$
1.30
$
1.20
$
3.41
$
2.83
Diluted earnings per share (1)
$
1.25
$
1.19
$
3.31
$
2.81
Basic weighted average number of common
shares outstanding
15,869
19,101
15,865
20,029
Diluted weighted average number
of common and common equivalent shares outstanding
16,479
19,232
16,353
20,191
Cash dividend declared per Class A and
B common share
$
0.20
$
0.15
$
0.60
$
0.30
(1)
Basic and diluted EPS are calculated the
same for both Class A and B common shares.
BLUEGREEN VACATIONS HOLDING
CORPORATION
ADJUSTED EBITDA ATTRIBUTABLE
TO SHAREHOLDERS RECONCILIATION
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
(in thousands)
Net income attributable to
shareholders
$
20,657
$
22,964
$
54,069
$
56,736
Net income attributable to the
non-controlling interest in Bluegreen/Big Cedar Vacations
4,840
4,682
13,284
11,954
Net Income
25,497
27,646
67,353
68,690
Add: Depreciation and amortization
3,835
3,766
11,674
11,538
Less: Interest income (other than interest
earned on
VOI notes receivable)
(1,569
)
(298
)
(4,119
)
(491
)
Add: Interest expense - corporate and
other
10,245
6,053
29,854
16,656
Add: Provision for income taxes
7,840
8,586
20,338
20,948
EBITDA
45,848
45,753
125,100
117,341
Add: Share-based compensation expense
1,596
836
4,631
2,398
Sale of vacant land and other assets
5
7
(2,923
)
(32
)
Adjusted EBITDA
47,449
46,596
126,808
119,707
Adjusted EBITDA attributable to the
non-controlling interest
(4,889
)
(4,746
)
(13,449
)
(12,131
)
Adjusted EBITDA attributable to
shareholders
$
42,560
$
41,850
$
113,359
$
107,576
The Company defines EBITDA as earnings, or net income, before
taking into account income tax, interest income (excluding interest
earned on VOI notes receivable), interest expense (excluding
interest expense incurred on debt secured by VOI notes receivable),
and depreciation and amortization. The Company defines Adjusted
EBITDA as EBITDA, adjusted to exclude amounts of loss (gain) on
assets held for sale, share-based compensation expense, and items
that the Company believes are not representative of ongoing
operating results. Adjusted EBITDA Attributable to Shareholders is
Adjusted EBITDA excluding amounts attributable to the
non-controlling interest in Bluegreen/Big Cedar Vacations (in which
Bluegreen owns a 51% interest). For purposes of the calculation of
EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to
Shareholders, no adjustments were made for interest income earned
on VOI notes receivable or the interest expense incurred on debt
that is secured by such notes receivable because they are both
considered to be part of the ordinary operations of the Company’s
business.
The Company considers EBITDA, Adjusted EBITDA, and Adjusted
EBITDA Attributable to Shareholders to be indicators of operating
performance, and they are used by the Company to measure its
ability to service debt, fund capital expenditures and expand its
business. EBITDA and Adjusted EBITDA are also used by companies,
lenders, investors and others because they exclude certain items
that can vary widely across different industries or among companies
within the same industry. For example, interest expense can be
dependent on a company’s capital structure, debt levels and credit
ratings. Accordingly, the impact of interest expense on earnings
can vary significantly among companies. The tax positions of
companies can also vary because of their differing abilities to
take advantage of tax benefits and because of the tax policies of
the jurisdictions in which they operate. As a result, effective tax
rates and provision for income taxes can vary considerably among
companies. EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable
to Shareholders also exclude depreciation and amortization because
companies utilize productive assets of different ages and use
different methods of both acquiring and depreciating productive
assets. These differences can result in considerable variability in
the relative costs of productive assets and the depreciation and
amortization expense among companies.
EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to
Shareholders are not recognized terms under GAAP and should not be
considered as an alternative to net income or any other measure of
financial performance or liquidity, including cash flow, derived in
accordance with GAAP, or to any other method or analyzing results
as reported under GAAP. The limitations of using EBITDA, Adjusted
EBITDA or Adjusted EBITDA Attributable to Shareholders as an
analytical tool include, without limitation, that EBITDA, Adjusted
EBITDA and Adjusted EBITDA Attributable to Shareholders do not
reflect (i) changes in, or cash requirements for, working capital
needs; (ii) interest expense, or the cash requirements necessary to
service interest or principal payments on indebtedness (other than
as noted above); (iii) tax expense or the cash requirements to pay
taxes; (iv) historical cash expenditures or future requirements for
capital expenditures or contractual commitments; or (v) the effect
on earnings or changes resulting from matters that the Company does
not believe to be indicative of future operations or performance.
Further, although depreciation and amortization are non-cash
charges, the assets being depreciated and amortized often have to
be replaced in the future, and EBITDA, Adjusted EBITDA and Adjusted
EBITDA Attributable to Shareholders do not reflect any cash that
may be required for such replacements. In addition, the Company’s
definition of Adjusted EBITDA or Adjusted EBITDA Attributable to
Shareholders may not be comparable to definitions of Adjusted
EBITDA, Adjusted EBITDA Attributable to Shareholders or other
similarly titled measures used by other companies.
BLUEGREEN VACATIONS HOLDING
CORPORATION
SYSTEM-WIDE SALES OF VOIs
RECONCILIATION (1)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
(in thousands)
2023
2022
2023
2022
Gross sales of VOIs
$
192,213
$
185,902
$
520,758
$
472,295
Add: Fee-Based VOI sales
23,875
20,949
62,985
84,645
System-wide sales of VOIs
$
216,088
$
206,851
$
583,743
$
556,940
(1)
System-wide Sales of VOIs is a non-GAAP
measure and represents all sales of VOIs, whether owned by
Bluegreen or a third party immediately prior to the sale. Sales of
VOIs owned by third parties are transacted as sales of VOIs in the
Bluegreen Vacation Club through the same selling and marketing
process Bluegreen uses to sell its VOI inventory. The Company
considers system-wide sales of VOIs to be an important operating
measure because it reflects all sales of VOIs by its sales and
marketing operations without regard to whether Bluegreen or a third
party owned such VOI inventory at the time of sale. System-wide
sales of VOIs should not be considered as an alternative to sales
of VOIs or any other measure of financial performance derived in
accordance with GAAP or to any other method of analyzing results as
reported under GAAP.
BLUEGREEN VACATIONS HOLDING
CORPORATION
FREE CASH FLOW RECONCILIATION
(1)
For the Three Months Ended
September 30,
(in thousands)
2023
2022
Net cash (used in) provided by operating
activities
$
(60,357
)
$
68,734
Purchases of property and equipment
(13,513
)
(9,459
)
Free Cash Flow
$
(73,870
)
$
59,275
(1)
Free cash flow is a non-GAAP measure
defined as cash provided by operating activities less capital
expenditures for property and equipment. The Company focuses on the
generation of free cash flow and considers free cash flow to be a
useful supplemental measure of its ability to generate cash flow
from operations and is a supplemental measure of liquidity. Free
cash flow should not be considered as an alternative to cash flow
from operating activities as a measure of liquidity. The Company’s
computation of free cash flow may differ from the methodology used
by other companies. Investors are cautioned that items excluded
from free cash flow are a significant component in understanding
and assessing the Company’s financial performance.
BLUEGREEN VACATIONS HOLDING
CORPORATION
SALES OF VOIs AND FINANCING
SEGMENT- ADJUSTED EBITDA
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2023
2022
2023
2022
Amount
% of System- wide sales of
VOIs (5)
Amount
% of System- wide sales of
VOIs (5)
Amount
% of System- wide sales of
VOIs (5)
Amount
% of System- wide sales of
VOIs (5)
(in thousands)
Bluegreen owned VOI sales (1)
$
192,213
89
$
185,902
90
$
520,758
89
$
472,295
85
Fee-Based VOI sales
23,875
11
20,949
10
62,985
11
84,645
15
System-wide sales of VOIs
216,088
100
206,851
100
583,743
100
556,940
100
Less: Fee-Based sales
(23,875
)
(11)
(20,949
)
(10)
(62,985
)
(11)
(84,645
)
(15)
Gross sales of VOIs
192,213
89
185,902
90
520,758
89
472,295
85
Provision for loan losses (2)
(32,880
)
(17)
(30,684
)
(17)
(87,451
)
(17)
(73,789
)
(16)
Sales of VOIs
159,333
74
155,218
75
433,307
74
398,506
72
Cost of VOIs sold (3)
(20,184
)
(13)
(14,805
)
(10)
(52,902
)
(12)
(44,868
)
(11)
Gross profit (3)
139,149
87
140,413
90
380,405
88
353,638
89
Fee-Based sales commission revenue (4)
15,694
66
14,241
68
41,266
66
57,174
68
Financing revenue, net of financing
expense
22,194
10
20,736
10
64,827
11
58,736
11
Other expense
(744
)
0
(663
)
0
(2,289
)
0
(1,173
)
0
Other fee-based services, title
operations and other, net
2,138
1
2,359
1
4,545
1
6,956
1
Net carrying cost of VOI inventory
(2,977
)
(1)
(4,905
)
(2)
(12,671
)
(2)
(12,975
)
(2)
Selling and marketing expenses
(115,765
)
(54)
(116,484
)
(56)
(314,885
)
(54)
(312,940
)
(56)
General and administrative
expenses - sales and marketing
(14,523
)
(7)
(13,421
)
(6)
(40,978
)
(7)
(37,355
)
(7)
Operating profit - sales of VOIs
and financing
45,166
21%
42,276
20%
120,220
21%
112,061
20%
Add: Depreciation and amortization
1,837
1,677
5,770
4,992
Sale of vacant land and other assets
3
—
(2,890
)
—
Adjusted EBITDA - sales of VOIs
and financing
$
47,006
$
43,953
$
123,100
$
117,053
(1)
Bluegreen owned sales represent sales of
VOIs acquired or developed by Bluegreen.
(2)
Percentages for provision for loan losses
are calculated as a percentage of gross sales of VOIs, which
excludes Fee-Based sales (and not as a percentage of system-wide
sales of VOIs).
(3)
Percentages for costs of VOIs sold and
gross profit are calculated as a percentage of sales of VOIs (and
not as a percentage of system-wide sales of VOIs).
(4)
Percentages for Fee-Based sales commission
revenue are calculated as a percentage of Fee-Based sales (and not
as a percentage of system-wide sales of VOIs).
(5)
Represents the applicable line item,
calculated as a percentage of system-wide sales of VOIs unless
otherwise indicated in the above footnotes.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107119504/en/
Bluegreen Vacations Holding Corporation
Contact Info Sharon Stennett 954-399-7193 Email:
IR@BVHcorp.com
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