Bluegreen Announces Record Second Quarter Results.

BOCA RATON, Fla.--(BUSINESS WIRE)--Oct. 27, 1998--Bluegreen Corporation (NYSE:BXG), a leading U.S. developer and marketer of residential land and timeshare resorts, today announced record financial results for the three and six month periods ended September 27, 1998.

Second Quarter Total Revenues Rise 43.8%; Operating and Net Income Reach Record Levels

Total revenues for the three months ended September 27, 1998 increased 43.8% to a record $68.3 million from $47.6 million for the same period last year. For the six months ended September 27, 1998, total revenues increased 57.8% to a record $130.3 million from $82.5 million for the same period last year. Operating income for the fiscal 1999 second quarter rose 91.0% to $8.9 million from $4.6 million in last year's second quarter. Operating income for the fiscal 1999 six month period improved to $16.0 million from operating income of $7.5 million for the comparable prior year period. Net income for the fiscal 1999 second quarter increased 97.1% to a record $5.5 million, or $.21 per diluted share, versus net income of $2.8 million, or $.13 per diluted share, for the same period last year. Net income for the fiscal 1999 six month period improved to $9.5 million, or $.37 per diluted share, from net income of $4.5 million, or $.22 per diluted share, for the comparable prior year period.

Second Quarter Timeshare Sales Climb 78.2%

Timeshare sales in the second quarter rose 78.2% to $26.0 million from the prior like quarter, reflecting the continued success of Bluegreen's strategy to expand its operations in the growing timeshare industry. Timeshare sales grew to represent 42.3% of total sales of real estate from 32.2% for the same period last year. Management believes that timeshare sales will grow to approximately 50% of total sales of real estate by the end of fiscal 1999. Fiscal 1999 second quarter Sales from the Company's residential land division (lot sales) increased 16.6% to $34.7 million from the comparable prior year period. Timeshare sales for the first six months of fiscal 1999 climbed 111.5% to $49.9 million from the prior year period, while land sales increased 26.1% to $65.3 million from the same period last year.

Higher timeshare sales for the second quarter ended September 27, 1998 are due primarily to approximately $4.6 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 $2.6 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.

Operating Margin Improves; Interest Income Reaches Record Levels

Selling, general and administrative expenses ("S,G&A") as a percentage of revenues for the second quarter of fiscal 1999 increased to 46.6% from 40.0% in the second quarter of fiscal 1998. This is due primarily to the increase in timeshare division sales as a percentage of total Company revenues, as selling and marketing costs are greater for the timeshare division. However, as timeshare revenues are increasing at a faster rate than the related S,G&A, the Company's operating margin increased to 14.4% in the fiscal 1999 second quarter from 10.2% in the same period one year ago. The growth in timeshare revenues also contributed to a significant increase in the Company's notes receivable portfolio, the average yield of which is 15.5% as of Sept. 27, 1998. Interest income for the fiscal 1999 second quarter reached $3.5 million, compared to $2.2 million for the same period last year.

George Donovan, President and Chief Executive Officer of Bluegreen, commented, "The fiscal 1999 second quarter was the most eventful in our Company's history. We entered the expanding urban timeshare market with the acquisition of The Lodge Alley Inn, located in Charleston, South Carolina, and commenced construction on the second phase of our Shore Crest Vacation Villas in Myrtle Beach, South Carolina. On the land side, the first 18 holes of the 27-hole Carolina National Golf Club at Winding River Plantation opened in September. Carolina National is the first Fred Couples designed golf course in the Carolinas."

Mr. Donovan continued, "We also strengthened our balance sheet with a $50 million stock purchase agreement with Morgan Stanley Real Estate Fund III, L.P. (MSREF), of which $25 million has been purchased by MSREF, and more recently bolstered our borrowing capacity by entering into new timeshare credit facilities aggregating $65 million. Coupled with the funds available under existing agreements for our residential land division, Bluegreen has approximately $112.5 million of credit at its disposal, subject to customary conditions and eligible collateral, to fund its growth strategy."

The Company also announced that, as of October 26, 1998, it had begun repurchasing shares of its common stock in open market transactions, pursuant to the share repurchase program announced on October 7, 1998.

Bluegreen is one of the leading companies engaged in the acquisition, development, marketing and sale of timeshare resorts and residential land. The Company's timeshare resorts are located in a variety of popular vacation destinations including the Smoky Mountains of Tennessee; Myrtle Beach, South Carolina; Charleston, South Carolina; Branson, Missouri; Orlando, Florida; Wisconsin Dells, Wisconsin; and Aruba, while its land operations are predominantly located in the Southeastern and Southwestern United States.

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
                    SECOND QUARTER EARNINGS REPORT
                   (in 000's, Except Per Share Data)

                            Three Months Ended    Six Months Ended
                             Sept. 27, Sept. 28,  Sept. 27,  Sept. 28,
                               1998        1997       1998      1997
                                  Unaudited             Unaudited
REVENUES:
Lot sales                   $  34,660    $ 29,732   $65,327   $51,802
Timeshare sales                26,040      14,612    49,860    23,570
Home sales                        815         976     1,873     3,040
Total sales of real estate     61,515      45,320   117,060    78,412
Other resort and golf
  operations revenue            3,357          --     5,946        --
Interest income                 3,486       2,233     7,249     4,134

Total operating revenues       68,358      47,553   130,255    82,546

EXPENSES:
Cost of sales                  20,741      21,418    41,996    36,574
Cost of other resort and
  golf operations               2,955          --     4,820        --
Selling, general and
  administrative expense       31,851      19,033    59,421    33,916
Interest expense                3,362       1,999     7,106     3,786
Provisions for losses             599         469       892       780

Total operating expenses       59,508      42,919   114,235    75,056
Income from operations          8,850       4,634    16,020     7,490
Other income                        5          61     2,431       153
Income before taxes             8,855       4,695    18,451     7,643
Provision for income taxes      3,542       1,925     7,381     3,134
Minority Interest in loss of
  consolidated subsidiary       (147)          --      (129)       --
Income before
  extraordinary Item            5,460       2,770    11,199      4,509
Extraordinary loss on early
  extinguishment of debt,
  net of Income taxes             --           --    (1,682)       --
Net Income                  $   5,460    $  2,770   $ 9,517   $ 4,509
Net income per share:
  Basic
    Income before
      extraordinary Item    $    0.25    $   0.14   $  0.53   $  0.22
    Extraordinary loss on
      early extinguishment
      of debt, net of
      Income taxes                 --          --     (0.08)       --
 Net Income                $     0.25    $   0.14   $  0.45      0.22

Diluted:
  Income before extraordinary
    Item                   $     0.21    $   0.13   $  0.43    $ 0.22
   Extraordinary loss on
     early extinguishment
     of debt of Income taxes       --          --     (0.06)       --
   Net Income              $     0.21   $    0.13  $   0.37  $   0.22

Weighted Average Number of
  Common and Common
  Equivalent Shares:
    Basic                      21,915      20,164    21,132    20,158
    Diluted                    28,965      24,966    28,235    24,733



                         BLUEGREEN CORPORATION
                 Condensed Consolidated Balance Sheets
                              ( in 000's)


                                   September 27,    March 29,
                                       1998           1998
                                   (unaudited)
ASSETS
Cash and cash equivalents         $    70,320     $  31,065
Contracts receivable, net.             13,900        15,484
Notes receivable, net                  67,521        79,785
Investment in securities               14,264        10,941
Inventory, net                        126,074       107,198
Property and equipment, net            22,426        17,223
Other assets                           19,135        11,267
 Total assets                        $333,640     $ 272,963

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable, accrued
  liabilities and other              $ 26,823     $  24,288
Deferred income                         7,809         8,392
Lines-of-credit and notes payable      29,970       121,090
Deferred income taxes                  13,519         8,011
10.50% senior secured notes payable   110,000             -
8.00% convertible subordinated
  notes payable                         6,000         6,000
8.25% convertible subordinated
  debentures                           34,371        34,739

 Total liabilities                    228,492       202,520

Minority interest                         321           450

Total shareholders' equity            104,827        69,993
   Total liabilities and
     shareholders' equity           $ 333,640     $ 272,963