BBX Capital Corporation Reports Financial Results For the First Quarter, 2019

BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB) (“BBX Capital” or the “Company”) reported today its financial results for the quarter ended March 31, 2019.

Selected highlights of BBX Capital’s consolidated financial results include:

First Quarter 2019 Compared to First Quarter 2018:

Total consolidated revenues of $221.1 million vs. $218.1 million

Net income attributable to shareholders of $1.5 million vs. $11.1 million

Diluted earnings per share of $0.02 vs. $0.11

Free cash flow outflows of $16.3 million vs. $9.8 million (1)

Adjusted EBITDA of $13.1 million vs. $25.0 million (2)
(1) See the supplemental tables included in this release for a reconciliation of BBX Capital’s cash flow from operating activities to free cash flow. Free cash flow is defined as cash provided by operating activities less capital expenditures for property and equipment.
(2) See the supplemental tables included in this release for a reconciliation of BBX Capital’s net income to adjusted EBITDA.

Balance Sheet as of March 31, 2019 Compared to December 31, 2018

Total consolidated assets of $1.8 billion vs. $1.7 billion

Total shareholders’ equity of $550.9 million vs. $549.6 million

Fully diluted book value per share of $5.60 vs. $5.70

Alan B. Levan, Chairman and Chief Executive Officer of BBX Capital, commented on the Company’s primary holdings which include Bluegreen Vacations Corporation, BBX Capital Real Estate, Renin Holdings, and IT’SUGAR:

Bluegreen Vacations

“Bluegreen Vacations has continued its focus on expansion and improvement of its operating platform with the goal of positioning Bluegreen for future growth. While system wide sales and net income was down compared to prior year quarter, Bluegreen’s sale of vacation packages increased over the comparable 2018 period which we consider a positive leading indicator for vacation ownership interest (“VOI”) sales in future periods. And while vacation packages sold through its Bass Pro marketing channel increased approximately 23% quarter over quarter, Bluegreen is continuing to explore new opportunities to grow partnerships and alliances, aiming to broaden its marketing and distribution channels with the objective of increasing its market penetration and branding. Separately, Bluegreen also experienced quarter over quarter improvements in sales volume per guest (“VPG”) and average sales price per transaction. In addition, Bluegreen’s other fee-based services revenue continued to grow, rising to $29.6 million during the period, primarily due to additional resorts under management and fee increases under certain existing management contracts.

BBX Capital Real Estate

“BBX Capital Real Estate continued the development of its Beacon Lake Community in St. Johns County, Florida. During the first quarter of 2019, the remaining 51 developed lots in Phase 1 of the project were sold to homebuilders. Additionally, BBX Capital Real Estate is currently developing lots within Phase II of its Beacon Lake Community, which is expected to include approximately 400 single-family homes and 196 townhomes. Sales of Phase II lots are anticipated to commence during the first quarter of 2020.

More recently, subsequent to quarter end, BBX Capital Real Estate sold its interest in PGA Station, a mixed-use project located on PGA Boulevard in Palm Beach Gardens, Florida, and its RoboVault self-storage facility in Fort Lauderdale.

Renin Holdings

“Renin continued its retail and online growth initiatives through sales of its products at Lowes, Home Depot, Wayfair and Costco. As a result, Renin’s trade sales grew to $19.3 million and gross margin rose to $4.2 million during the first quarter of 2019.

IT’SUGAR

“IT’SUGAR, one of the largest specialty candy retailers in the world, delivered solid trade sales rising to $17.2 million during the first quarter of 2019. The growth in trade sales was due in part to new stores opened in the second half of 2018, as well as FAO Schweetz, the “retail-tainment” experience operated by IT’SUGAR within the FAO Schwarz flagship store in New York City at 30 Rockefeller Plaza.

“As we have stated each quarter, since many of BBX Capital’s assets do not generate income on a regular or predictable basis, our objective continues to be long term growth as measured by increases in book value and intrinsic value over time. Our goal remains to streamline our business verticals so that our business model can be more easily analyzed and followed by the markets. To this end, we are continuing to review and evaluate the performance of our investments and consider transactions involving the sale or a spin-off of assets, investments or subsidiaries,” Levan concluded.

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For more complete and detailed information regarding BBX Capital and its financial results, business, operations, investments and risks, please see BBX Capital’s Annual Report on Form 10-K for the year ended December 31, 2018 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, which will be available on the SEC’s website, https://www.sec.gov, and on BBX Capital’s website, www.BBXCapital.com, upon filing with the SEC.

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 for how these terms are defined and for reconciliations of such measures to the most comparable GAAP financial measures.

The following selected information relates to the operating activities of Bluegreen Vacations Corporation (“Bluegreen Vacations” or “Bluegreen”), BBX Capital Real Estate, LLC (“BBXRE”), Renin Holdings, LLC (“Renin”), and IT’SUGAR, LLC (“IT’SUGAR”).

Bluegreen Vacations – Selected Financial Data

Selected highlights of Bluegreen Vacations’ financial results include:

First Quarter 2019 Compared to First Quarter 2018:

Sales of VOIs of $51.7 million vs. $56.1 million

System-wide sales of VOIs of $129.7 million vs. $132.8 million (1)

Other fee-based services revenue of $29.6 million vs. $28.0 million

Income before income taxes of $22.2 million vs. $30.8 million

Adjusted EBITDA of $26.2 million vs. $33.3 million (2)

Free cash flow of $3.4 million vs. $8.0 million (3)
(1) See the supplemental tables included in this release for a reconciliation of Bluegreen’s Sales of VOIs to System-wide sales of VOIs.
(2) See the supplemental tables included in this release for a reconciliation of Bluegreen’s net income to Adjusted EBITDA.
(3) See the supplemental tables included in this release for a reconciliation of Bluegreen’s cash flow from operating activities to free cash flow.

In addition to BBX Capital’s Annual Report on Form 10-K for the year ended December 31, 2018, more complete and detailed information regarding Bluegreen Vacations and its financial results, business, operations and risks can be found in Bluegreen Vacations’ Annual Report on Form 10-K for the year ended December 31, 2018 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, which is available to view on the SEC’s website, https://www.sec.gov, and on Bluegreen Vacations’ website, www.BluegreenVacations.com.

BBX Capital Real Estate – Selected Financial Data

Selected highlights of BBX Capital Real Estate’s financial results include:

First Quarter 2019 Compared to First Quarter 2018:

Revenues of $6.6 million vs. $12.8 million

Pre-tax income from sales of real estate inventory of $1.6 million vs. $2.2 million

Equity in net (losses) earnings of unconsolidated real estate joint ventures of ($17,000) vs. $1.3 million

Income before income taxes of $2.4 million vs. $12.1 million

BBX Capital Real Estate’s (“BBXRE”) results for the quarter ended March 31, 2019 as compared to the same 2018 period primarily reflected a decrease in interest income and recoveries due to the lower balances held in its legacy asset portfolio and in the impact of the timing of disposition activity within its real estate portfolio as the 2018 period included the sale of a student housing complex and the sale of a retail building by its PGA Design Center joint venture.

During the first quarter of 2019, the remaining 51 lots in Phase I of the Beacon Lake Community project in St. Johns County, Florida, were sold compared to 83 lots sold in the 2018 period. As discussed above, BBXRE is currently developing Phase II of its Beacon Lake Community and sales of Phase II lots are anticipated to commence during the first quarter of 2020.

Subsequent to March 31, 2019, BBXRE monetized various investments in its real estate portfolio, including the sale of RoboVault, a self-storage facility located in Fort Lauderdale, Florida, and its properties in PGA Station. In addition, a joint venture sponsored by the Altman Companies, and in which BBXRE has an investment, sold Altis at Lakeline, a 354-unit multifamily apartment community located in Cedar Park, Texas.

Renin – Selected Financial Data

Selected highlights of Renin’s financial results include:

First Quarter 2019 Compared to First Quarter 2018:

Trade sales of $19.3 million vs. $15.0 million

Gross margin of $4.2 million vs. $2.8 million

Gross margin percentage of 21.8% vs. 18.7%

Income before income taxes of $1.1 million vs. a loss before income taxes of $30,000

Adjusted EBITDA of $1.6 million vs $0.6 million (1)
(1) See the supplemental tables included in this release for a reconciliation of Renin’s net income to Adjusted EBITDA.

Renin’s operating results for the quarter ended March 31, 2019 reflected an increase in trade sales and gross margin primarily associated with higher sales volume from Renin’s retail channel customers, including barn door and closet door products, partially offset by an increase in selling, general, and administrative expenses reflecting higher marketing expenses associated with advertising programs for certain of its retail channel customers.

IT’SUGAR- Selected Financial Data

Selected highlights of IT’SUGAR’s financial results include:

First Quarter 2019 Compared to First Quarter 2018:

Trade sales of $17.2 million vs. $16.7 million

Gross margin of $6.0 million vs. $6.1 million

Gross margin percentage of 34.9% vs. 36.5%

Loss before income taxes of $1.9 million for both periods

Adjusted EBITDA of ($0.8) million for both periods (1)
(1) See the supplemental tables included in this release for a reconciliation of IT’SUGAR’s net income to Adjusted EBITDA.

IT’SUGAR’s operating results for the quarter ended March 31, 2019 reflected an increase in trade sales primarily associated with the opening of new locations during the second half of 2018, including the FAO Schweetz location in New York City operated by IT’SUGAR, partially offset by an overall increase in store occupancy costs, which resulted in a decline in gross margin.

Other Investments

The Company also has other investments in various operating businesses, including restaurant locations throughout Florida and companies in the confectionery industry. The businesses generated aggregate losses before income taxes of $2.7 million and $3.5 million during the three months ended March 31, 2019 and 2018, respectively. Although the Company expects to continue to incur losses from these businesses during 2019, the operating results for these businesses for the quarter ended March 31, 2019 as compared to the 2018 period reflect the Company’s efforts during 2018 to reduce the size of certain of its businesses in the confectionery industry, including the closure of manufacturing facilities and a reduction in personnel and infrastructure.

About BBX Capital Corporation: BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB) is a Florida-based diversified holding company whose principal investments include Bluegreen Vacations Corporation (NYSE: BXG), BBX Capital Real Estate, Renin Holdings, and IT’SUGAR. For additional information, please visit www.BBXCapital.com.

About Bluegreen Vacations Corporation: Bluegreen Vacations Corporation (NYSE: BXG) is a leading vacation ownership company that markets and sells vacation ownership interests (VOIs) and manages resorts in top leisure and urban destinations. The Bluegreen Vacation Club is a flexible, points-based, deeded vacation ownership plan with approximately 217,000 owners, 69 Club and Club Associate Resorts and access to over 11,000 other hotels and resorts through partnerships and exchange networks as of March 31, 2019. Bluegreen Vacations also offers a portfolio of comprehensive, fee-based resort management, financial, and sales and marketing services, to or on behalf of third parties. Bluegreen is approximately 90% owned by BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB), a diversified holding company. For further information, visit www.BluegreenVacations.com.

2019-05-07T08:51:52+00:00May 7th, 2019|Tags: |