Bluegreen Corporation Reports 2011 Second Quarter Financial Results

Bluegreen Resorts system-wide sales, including sales made on behalf of third parties, were $79.1 million as compared to $79.5 million for Q2 2010.

–Total fee-based service revenues rose 23% to $35.6 million for Q2 2011 from $28.9 million for Q2 2010.

–Income from continuing operations rose 18% to $11.3 million, or $0.30 per diluted share, from income from continuing operations of $9.6 million, or $0.26 per diluted share, in Q2 2010.

–Net loss of $26.7 million, or $0.83 per diluted share, which included a loss from discontinued operations of $36.4 million, or $1.13 per diluted share, related to Bluegreen Communities.

–Cash flow from operating and investing activities (“Free Cash Flow”) of $75.6 million for the six months ended June 30, 2011 compared to $77.9 million for the six months ended June 30, 2010; and

–Unrestricted cash and cash equivalents at June 30, 2011 of $67.1 million [member]

Bluegreen Corporation, a leading timeshare sales, marketing and resort management company, today announced financial results for the three and six months ended June 30, 2011.

John M. Maloney Jr., President and Chief Executive Officer of Bluegreen, commented, “We are very pleased with second quarter 2011 results from continuing operations, highlighted by 23% growth in our fee-based service revenues, lower Bluegreen Resorts selling and marketing expenses as a percentage of system-wide sales, a 18% increase in income from continuing operations, an improved debt profile, and Free Cash Flow of $41.6 million. Our core product, the points-based Bluegreen Vacation Club, provides a platform that can support three potential sources of revenue: our traditional timeshare (VOI) business; a growing fee-based services business; and a finance business. While acknowledging the macroeconomic challenges facing our business and industry, we believe that we are well positioned to enhance the long-term value of Bluegreen for our shareholders.”

Additional operating highlights included:

– In connection with its fee-based services business, Resorts sold $27.0 million of third-party VOI inventory in Q2 2011, generating sales and marketing commissions of approximately $18.3 million and contributing an estimated $4.6 million to Resorts operating profit. This compares to sales of $18.2 million of third-party VOI inventory, which generated sales and marketing commissions of $12.1 million and contributed an estimated $2.4 million to Resorts operating profit in Q2 2010. In Q2 2011, Bluegreen provided sales and marketing services for 7 resorts under fee-based service arrangements, as compared to 5 such arrangements during Q2 2010;

– Total revenues from fee-based services (including sales and marketing commissions, resort management services, title and other services) rose 23% to $35.6 million in Q2 2011. As of June 30, 2011, Bluegreen managed 45 timeshare resort properties and hotels compared to 43 as of June 30, 2010;

– Operating profit at Resorts rose 31% to $18.3 million for Q2 2011 from $14.0 million for Q2 2010;

– Cash received from Resorts sales – either at closing or within 30 days of closing and including down payments received on financed sales – represented 57% of Resorts sales for the first six months of 2011;

– Debt-to-equity (recourse and non-recourse) declined to 2.53:1 at June 30, 2011 from 2.58:1 at December 31, 2010. Debt-to-equity (recourse only) declined to 1.20:1 at June 30, 2011 from 1.22:1 at December 31, 2010.

Income from continuing operations rose 18% to $11.3 million, or $0.30 per diluted share, from income from continuing operations of $9.6 million, or $0.26 per diluted share, in Q2 2010.

As previously announced in June 2011, the Company’s Board of Directors made a determination in June to seek to sell the Bluegreen Communities business segment or all or substantially all of its assets. As a result, Bluegreen Communities is accounted for as a discontinued operation for all periods presented. In July 2011, the Company entered into a non-binding letter of intent with a third party contemplating the sale of Bluegreen Communities’ real estate assets. However, as of the date of this release, the Company had not entered into any definitive agreement with respect to the sale of Bluegreen Communities or its assets and the Company may not be successful in its efforts to consummate a sale.

The loss from discontinued operations, net of income taxes, for Q2 2011 was $36.4 million, or $1.13 per diluted share, compared to a loss from discontinued operations of $3.9 million, or $0.12 per diluted share, in Q2 2010. The loss from discontinued operations for Q2 2011 included a $56.4 million non-cash, pre-tax charge to write-down Bluegreen Communities’ assets held for sale to estimated fair market value, less cost to sell. As of June 30, 2011, the carrying value of Bluegreen Communities’ real estate assets was $31.8 million. Revenues at Bluegreen Communities for Q2 2011 were $2.6 million as compared to $2.7 million in Q2 2010.

Including the impact of discontinued operations, the net loss for Q2 2011 was $26.7 million, or $0.83 per diluted share, compared to net income of $4.3 million, or $0.14 per diluted share, in Q2 2010.

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