Bluegreen Corporation Reports Record Second Quarter Results.Business Editors BOCA RATON Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , Fla.--(BUSINESS WIRE)--July 21, 2003 Bluegreen Corporation (NYSE NYSE See: New York Stock Exchange : BXG) Q2 2003 Highlights vs. Q2 2002 -- Net income rises to $6.2 million, or $.23 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share -- Pre-tax income increases 57% to $10.8 million -- Total operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. up 29% to $106.8 million Bluegreen Corporation (NYSE: BXG), a leading U.S. developer and marketer of drive-to timeshare A form of shared property ownership, commonly in vacation or recreation condominium property, in which rights vest in several owners to use property for a specified period each year. resorts ("Bluegreen(R) Resorts") and planned residential and golf communities ("Bluegreen Communities Bluegreen Communities™ is a publicly traded land developer on the New York Stock Exchange. Bluegreen develops planned residential communities or planned unit developments (PUDs) by acquiring large sections of unimproved land outside major U.S. "), today announced financial results for the three and six months ended June 30, 2003 (see attached tables). Net income for the second quarter of 2003 was $6.2 million, or $.23 per diluted share, versus a net loss of $1.4 million, or $.06 per diluted share, for the same period last year. Net income for the six months ended June 30, 2003 was $8.4 million, or $.32 per diluted share, versus a net loss of $382,000, or $.02 per diluted share, for the same period last year. Net income for the three and six month periods ended June 30, 2002 were impacted by a cumulative effect of a change in accounting principle that reduced net income in these periods by approximately $5.9 million, net of tax, or $.23 per diluted share. This represented the one-time write off of all deferred telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. costs on the Company's balance sheet, effective April 1, 2002. There was no change in accounting principle during the 2003 periods. Income before cumulative effect of change in accounting principle for the second quarter of 2003 was $6.2 million, or $.23 per diluted share, versus income before cumulative effect of change in accounting principle of $4.1 million, or $.17 per diluted share, for the same period last year. Income before cumulative effect of change in accounting principle for the six months ended June 30, 2003 was $8.4 million, or $.32 per diluted share, versus income before cumulative effect of change in accounting principle of $5.2 million, or $.21 per diluted share, for the same period last year. Resorts sales increased 48.2% to $62.6 million during the second quarter of 2003 from $42.2 million during the same period last year, due primarily to the continued same-resort sales increases at a majority of Bluegreen's properties. Sales at Big Cedar cedar, common name for a number of trees, mostly coniferous evergreens. The true cedars belong to the small genus Cedrus of the family Pinaceae (pine family). Wilderness Club(TM) enjoyed a triple-digit percentage increase over the same period last year, while sales at the Lodge Alley Inn nearly doubled. The Company also reported strong sales of its Bluegreen Vacation Club(R) product through its recently opened sales offices in: Bloomington, MN (opened in November 2002); Mountain Run at Boyne, MI (opened in November 2002); Boyne Highlands, MI, Solara Surfside surf·side adj. Situated or sited at or near the seashore: surfside parties; a surfside road. , FL and Casa Del Mar The Casa Del Mar (also known as the Thomas Case House) is a historic home in Sarasota, Florida. It is located at 25 South Washington Drive. On February 14, 1997, it was added to the U.S. National Register of Historic Places. , FL (each opened in March 2003). Communities sales were $23.5 million during the second quarter of 2003 versus $28.9 million during the same period last year, due primarily to the effect of percentage-of-completion accounting. As of June 30, 2003, approximately $12.0 million and $5.0 million of Communities sales and profits, respectively, were deferred under the percentage-of-completion method percentage-of-completion method A method of recognizing revenues and costs from a long-term project in relation to the percentage completed during the course of the project. of accounting. These amounts will be recognized commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with the development of the projects. Revenues and deferred sales included strong initial sales at Traditions of Braselton(TM), a new golf community located near Atlanta, GA, which held its grand opening in June 2003. Other resort and golf operations revenue for the second quarter of 2003 increased 121% to $14.8 million, due primarily to the September 2002 acquisition of TakeMeOnVacation, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control and affiliates. Additional revenue was generated by the Company's wholly-owned title agency and from managing the Bluegreen Vacation Club, primarily a result of the increase in Bluegreen Resorts' sales. George F. Donovan, President and Chief Executive Officer of Bluegreen, commented, "High quality properties, a focus on customer service and the continued effectiveness of our sales and marketing strategies produced strong second quarter results. We are also operating efficiently, as evidenced by decreases in selling, general & administrative expenses ("SG&A") as a percentage of total operating revenue. In addition, total cost of sales declined to 30.5% from 35.1% in the same period last year, primarily as a result of a higher proportion of Bluegreen Resorts' sales to total sales in the second quarter." Bluegreen's balance sheet at June 30, 2003 reflected a book value of $6.81 per share and a debt-to-equity ratio debt-to-equity ratio The relationship between long-term funds provided by creditors and funds provided by owners. A firm's debt-to-equity ratio is calculated by dividing long-term debt by owners' equity. Both items are shown on the balance sheet. of 1.28:1. During the second quarter of 2003, Bluegreen sold approximately $21.2 million of timeshare receivables under its existing timeshare receivables purchase facility. The receivables were sold without recourse A phrase used by an endorser (a signer other than the original maker) of a negotiable instrument (for example, a check or promissory note) to mean that if payment of the instrument is refused, the endorser will not be responsible. to Bluegreen (except for breaches of certain representations and warranties) and the Company retained a residual interest Residual Interest A type of interest payment received by investors in a real estate mortgage investment conduit (REMIC). Notes: Investors receive interest payments after all required regular interest has been paid to investors within higher priority tranches. in the receivables sold. Bluegreen will continue to service the receivables that were sold. This sale generated approximately $18.1 million in cash and the Company recognized a $1.3 million gain on the sale of these receivables. Bluegreen is one of the leading companies engaged in the acquisition, development, marketing and sale of vacation ownership resorts and residential home sites. Bluegreen Resorts The Bluegreen Resort Company was started in 1984, to partner with timeshare resorts. It has grown into a major player in the timeshare community. Bluegreen is traded on the New York Stock Exchange with the symbol BXG. Its primary competitor is Marriott Vacation Club International. are located in a variety of popular vacation destinations including Orlando, Florida The city of Orlando is a major city in central Florida and is the county seat of Orange County, Florida. According to the 2000 census, the city population was 185,951. A 2006 U.S. ; the Smoky Mountains Smoky Mountains: see Great Smoky Mountains. of Tennessee; Myrtle Beach, South Carolina Myrtle Beach is a city and in Horry County, South Carolina, United States. It is part of the Grand Strand, a stretch of beaches along the South Carolina coastline, and the combined Myrtle Beach-Conway-North Myrtle Beach MSA. ; Charleston, South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. ; Branson, Missouri Branson is a city in Taney County, Missouri, United States. It was named for Rueben Branson, postmaster and operator of a general store in the area in the 1880s. [2]Historically, Branson was a small city. ; Wisconsin Dells, Wisconsin Wisconsin Dells is a city located in south-central Wisconsin, with a population of 2,418 as of the 2000 census. Wisconsin Dells is located partially within four counties: Adams County, Columbia County, Juneau County, Sauk County. ; Gordonsville, Virginia Gordonsville is a town in Orange County, Virginia, in the United States. As of the 2000 census, the town population was 1,498. History Nathaniel Gordon purchased 1,350 acres in 1787 and in 1794, or possibly earlier, applied for and was granted a license to operate a ; Ridgedale, Missouri; Surfside, Florida |CITIZEN'S BLOG = [2] Surfside is a town in Miami-Dade County, Florida, United States. The population was 4,909 at the 2000 census. As of 2005, the population recorded by the U.S. Census Bureau is 4,710. ; Boyne Mountain Boyne Mountain is a year round resort in Northern Michigan (near Boyne City) and was developed around the skiing industry of the region by Everett Kircher. Boyne Mountain now includes golf, tubing, cross country trails, Solace Spa, shopping, fine dining, and has an indoor , Michigan; and Aruba, while its Bluegreen Communities operations are predominantly located in the Southeastern and Southwestern United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. and the Company desires to take advantage of the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 in connection with these statements. Statements contained herein are not statements of historical fact may be deemed forward-looking statements. The words "believe," "expect," "intend," "anticipate," "project," "may," "should," "designed to," "estimate," "hope," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. The Company does not undertake and specifically disclaims any 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 based on current expectations and assumptions and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and many of which are beyond the Company's control. Future events 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 to include, but are not limited to, the following: that sales and marketing strategies will not be as successful as anticipated, new properties may not be successful or the sell-out period will be longer than projected, that Company estimates of the total anticipated cost of its real estate projects increase and therefore adversely impact profits recognized under the percentage-of-completion method of accounting, that the Company may not have sufficient sources of financing, may not be able to consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. future sales of receivables or may not realize the gain on sales of these receivables, that the Company's estimates of the key assumptions that are related to its valuation of the fair value of its retained interests Retained interest (also colloquially known as a payout penalty) is future, currently unpaid, interest that some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the completion of the original term. in notes receivable sold may adversely change, and the other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including its most recent Transition Report on Form 10-KT filed on March 31, 2003, and its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. to be filed on or about August 14, 2003.
BLUEGREEN CORPORATION
Consolidated Statements of Operations
(In 000's, Except Per Share Data)
(UNAUDITED)
Three Months Ended Six Months Ended
------------------ ----------------
June 30, June 30, June 30, June 30,
2003 2002 2003 2002
---- ---- ---- ----
(Restated) (Restated)
REVENUES:
---------
Resorts sales $ 62,573 $ 42,226 $107,135 $ 75,606
Communities
sales 23,453 28,887 40,673 51,432
-------- -------- -------- --------
Total sales 86,026 71,113 147,808 127,038
Other resort and golf
operations revenue 14,831 6,711 28,043 12,997
Interest income 4,112 3,763 7,867 7,355
Gain on sale of
notes receivable 1,323 1,231 2,884 3,297
Other income 551 - 1,123 -
-------- -------- -------- --------
Total operating
revenues 106,843 82,818 187,725 150,687
-------- -------- -------- --------
EXPENSES:
---------
Cost of sales:
Resorts cost of
sales 13,223 10,740 22,863 18,602
Communities
cost of sales 13,050 14,227 22,470 28,757
-------- -------- -------- --------
Total cost of sales 26,273 24,967 45,333 47,359
Cost of other resort
and golf operations 14,560 5,719 28,707 11,419
Selling, general and
administrative expense 50,497 40,456 89,727 74,355
Provision for loan
losses 1,699 1,081 3,225 2,249
Interest expense 2,972 3,223 5,976 6,111
Other expense - 459 - 344
-------- -------- -------- --------
Total operating
expenses 96,001 75,905 172,968 141,837
-------- -------- -------- --------
Income before taxes 10,842 6,913 14,757 8,850
Provision for income
taxes 4,174 2,661 5,681 3,407
Minority interest in
income of consolidated
subsidiary 442 104 723 246
-------- -------- -------- --------
Income before
cumulative effect of
change in accounting
principle $ 6,226 $ 4,148 $ 8,353 $ 5,197
Cumulative effect of
change in accounting
principle, net of
tax - (5,929) - (5,929)
Minority interest
in cumulative
effect of change
in accounting
principle, net of
tax - (350) - (350)
-------- -------- -------- --------
Net income
(loss) $ 6,226 $ (1,431) $ 8,353 $ (382)
======== ======== ======== ========
Earnings (loss)
per share:
Basic:
Income before
cumulative
effect of change
in accounting
principle $ 0.25 $ 0.17 $ 0.34 $ 0.21
Cumulative
effect of change
in accounting
principle, net of
tax - (0.23) - (0.23)
-------- -------- -------- --------
Net income
(loss) $ 0.25 (0.06) 0.34 (0.02)
======== ======== ======== ========
Diluted:
Income before
cumulative effect
of change in
accounting principle $ 0.23 $ 0.17 $ 0.32 $ 0.21
Cumulative effect
of change in
accounting principle,
net of tax - (0.23) - (0.23)
-------- -------- -------- --------
Net income
(loss) $ 0.23 (0.06) 0.32 (0.02)
======== ======== ======== ========
Weighted-average number
of common and common
equivalent shares:
Basic 24,590 24,375 24,589 24,375
======== ======== ======== ========
Diluted 28,983 24,375 28,913 24,375
======== ======== ======== ========
BLUEGREEN CORPORATION
Condensed Consolidated Balance Sheets
(in 000's)
June 30, Dec. 31,
2003 2002
---- ----
(unaudited)
ASSETS
Cash and cash equivalents (unrestricted) $ 25,280 $ 26,354
Cash and cash equivalents (restricted) 31,642 20,551
Contracts receivable, net 30,666 16,230
Notes receivable, net 70,474 61,795
Inventory, net 191,593 173,131
Retained interests in notes receivable sold 55,764 44,228
Property and equipment, net 53,699 51,787
Other assets 39,918 39,916
-------- --------
Total assets $499,036 $433,992
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable, accrued liabilities and other $ 51,260 $ 37,415
Deferred income 24,637 19,704
Deferred income taxes 37,374 31,208
Lines-of-credit and notes payable 69,992 39,769
10.50% senior secured notes payable 110,000 110,000
8.25% convertible subordinated debentures 34,371 34,371
-------- --------
Total liabilities 327,634 272,467
Minority interest 3,965 3,242
Total shareholders' equity 167,437 158,283
-------- --------
Total liabilities and shareholders' equity $499,036 $433,992
======== ========
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