Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

BBX Capital Corporation Reports Financial Results For the Fourth Quarter and Full Year, 2019

BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB) ("BBX Capital" or the "Company") reported today its financial results for the quarter and year ended December 31, 2019.

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

Fourth Quarter 2019 Compared to Fourth Quarter 2018:

• Total consolidated revenues of $234.2 million vs. $231.8 million
• Net income attributable to shareholders of $5.5 million vs. $11.3 million
• Diluted earnings per share of $0.06 vs. $0.12
• Free cash flow of $8.5 million vs. $30.8 million
• Adjusted EBITDA of $25.0 million vs. $36.6 million

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018:

• Total consolidated revenues of $946.9 million vs. $945.9 million
• Net income attributable to shareholders of $17.7 million vs. $35.1 million
• Diluted earnings per share of $0.19 vs. $0.36
• Free cash flow of $42.7 million vs. $41.1 million
• Adjusted EBITDA of $123.3 million vs. $109.3 million

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

• Total consolidated assets of $1.8 billion vs. $1.7 billion
• Total shareholders' equity of $549.8 million vs. $549.6 million
• Fully diluted book value per share of $5.84 vs. $5.70 ⁽¹⁾

During the quarter ended December 31, 2019, the Company repurchased approximately 1.4 million shares of its Class A Common Stock for $6.6 million pursuant to the share repurchase program approved by the Company's Board of Directors in June 2017. As of December 31, 2019, the Company had repurchased approximately 4.8 million shares of its Class A Common Stock for $25.4 million under the June 2017 repurchase program.

"The results for the fourth quarter and full year 2019 reflect BBX Capital's focus on its strategic initiatives and objective of achieving long-term growth," commented Alan B. Levan, Chairman and Chief Executive Officer of BBX Capital Corporation. "While Bluegreen's results in 2019 were negatively impacted by issues associated with our relationship with Bass Pro, we are pleased that Bluegreen and Bass Pro were able to resume building on their very successful 20-year partnership, as reflected in Bluegreen's entry into 15 Cabela's retail stores as of December 31, 2019. BBX Capital Real Estate unlocked intrinsic value through the monetization of investments in its portfolio, including its Altis at Bonterra joint venture, and continues to be focused on expanding its pipeline of investment opportunities in multifamily apartment and residential housing communities. Renin continued to seek to diversify its customer base while navigating the complexities associated with tariffs on Chinese produced goods. IT'SUGAR grew its ?retail-tainment' branded stores with the recent opening of its newest flagship store at American Dream in New Jersey.

"Since many of our 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. One of our goals is to streamline our business verticals so that our business model can be more easily analyzed and followed by the markets. To this end, we plan to continue to review the performance of our assets and investments and consider transactions involving the sale, disposition, or spin-off of assets, investments, or subsidiaries," Levan concluded.

Issues arising as a consequence of the coronavirus outbreak have resulted in uncertainties for our operations and results moving forward. See "Forward-Looking Statements" below.

Additional Information

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, 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, which is expected to occur no later than March 16, 2020.

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.

Financial Results

The following selected information relates to the financial results of Bluegreen Vacations, BBX Capital Real Estate, BBX Sweet Holdings, and Renin.

Bluegreen Vacations - Selected Financial Data

Selected highlights of Bluegreen Vacations' financial results include:

Fourth Quarter 2019 Compared to Fourth Quarter 2018:

• Sales of Vacation Ownership Interests ("VOIs") of $69.0 million vs. $58.8 million
• System-wide sales of VOIs of $155.5 million vs. $146.0 million
• Fee-based sales commissions of $46.8 million vs. $48.8 million
• Other fee-based services revenue of $31.2 million vs. $28.6 million
• Income before income taxes of $15.7 million vs. $26.2 million
• Adjusted EBITDA of $30.0 million vs. $31.7 million
• Free cash flow of $14.3 million vs. $22.9 million

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018:

• Sales of VOIs of $255.4 million vs. $254.2 million
• System-wide sales of VOIs of $619.1 million vs. $624.1 million
• Fee-based sales commissions of $207.8 million vs. $216.4 million
• Other fee-based services revenue of $125.2 million vs. $118.0 million
• Income before income taxes of $58.3 million vs. $128.9 million
• Adjusted EBITDA of $121.8 million vs. $141.8 million
• Free cash flow of $46.1 million vs. $44.3 million

In addition to BBX Capital's Annual Report on Form 10-K for the year ended December 31, 2019, 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, 2019, which will be available on the SEC's website, https://www.sec.gov, and on Bluegreen Vacations' website, www.BluegreenVacations.com, upon filing with the SEC, which is expected to occur no later than March 16, 2020.

BBX Capital Real Estate - Selected Financial Data

Selected highlights of BBX Capital Real Estate's ("BBXRE") financial results include:

Fourth Quarter 2019 Compared to Fourth Quarter 2018:

• Revenues of $2.7 million vs. $5.2 million
• Equity in net earnings of unconsolidated real estate joint ventures of $0.6 million vs. $13.0 million
• Income before income taxes of $2.1 million vs. $14.6 million

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018:

• Revenues of $21.0 million vs. $31.2 million
• Equity in net earnings of unconsolidated real estate joint ventures of $37.9 million vs. $14.2 million
• Income before income taxes of $52.7 million vs. $30.2 million

BBXRE's operating results for the quarter ended December 31, 2019 as compared to the same 2018 period primarily reflects the timing of sales activity in BBXRE's portfolio, as the 2018 period included the impact of significant gains recognized upon the sale of multifamily apartment communities by two unconsolidated joint ventures.

BBX Sweet Holdings- Selected Financial Data

Selected highlights of BBX Sweet Holding's ("BBXSH") financial results include:

Fourth Quarter 2019 Compared to Fourth Quarter 2018:

• Trade sales of $29.4 million vs. $28.7 million
• Gross margin of $10.5 million vs. $9.6 million
• Gross margin percentage of 35.8% vs. 33.5%
• Loss before income taxes of $(0.8) million vs. $(6.4) million
• Adjusted EBITDA of $0.6 million vs $(0.7) million

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018:

• Trade sales of $105.4 million vs. $101.2 million
• Gross margin of $37.7 million vs. $35.4 million
• Gross margin percentage of 35.8% vs. 34.9%
• Loss before income taxes of $(5.1) million vs. $(15.0) million
• Adjusted EBITDA of $0.5 million vs. $(2.9) million

BBX Sweet Holdings ("BBXSH") is engaged in the ownership and management of operating businesses in the confectionery industry, including IT'SUGAR, Hoffman's Chocolates, and Las Olas Confections and Snacks. BBXSH's operating results for the quarter ended December 31, 2019 as compared to the same 2018 period reflect an increase in trade sales and improved gross margin primarily related to increased sales at IT'SUGAR, including sales from its new locations that were opened in 2019, improvements in efficiencies at BBXSH's manufacturing facility in Orlando, and lower selling, general, and administrative expenses as a result of cost reduction initiatives. In addition, BBXSH's loss before income taxes in the 2018 period included a $4.0 million goodwill impairment loss associated with a subsidiary in the wholesale confection business.

In December 2019, IT'SUGAR opened its 22,000 square foot, three-story candy department store at American Dream, a 3 million square foot shopping and entertainment complex in New Jersey.

Renin - Selected Financial Data

Selected highlights of Renin's financial results include:

Fourth Quarter 2019 Compared to Fourth Quarter 2018:

• Trade sales of $16.4 million vs. $21.2 million
• Gross margin of $3.2 million vs. $4.2 million
• Gross margin percentage of 19.2% vs. 19.7%
• Income before income taxes of $0.3 million vs. $1.8 million
• Adjusted EBITDA of $0.7 million vs $2.4 million

Year Ended December 31, 2019 Compared to the Year Ended December 31, 2018:

• Trade sales of $67.5 million vs. $68.4 million
• Gross margin of $13.3 million vs. $12.9 million
• Gross margin percentage of 19.7% vs. 18.9%
• Income before income taxes of $1.8 million vs. $2.5 million
• Adjusted EBITDA of $3.7 million vs $5.0 million

Renin's operating results for the quarter ended December 31, 2019 as compared to the same 2018 period primarily reflect a decrease in trade sales in 2019 due to lower sales volume from Renin's retail channel customers. The 2018 period included a holiday promotion with a customer that was not repeated in 2019 and a new customer program that is in less stores in 2019. Renin's operating results in 2019 were also impacted by a decline in gross margin percentage primarily resulting from tariffs on imported product and higher selling, general and administrative expenses primarily due the recognition of severance expenses and higher employee compensation expense associated with performance bonuses.

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, BBX Sweet Holdings, and Renin. 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 and manages resorts in popular leisure and urban destinations. The Bluegreen Vacation Club is a flexible, points-based vacation ownership plan with approximately 220,000 owners, 68 Club and Club Associate Resorts, and access to nearly 11,350 other hotels and resorts through partnerships and exchange networks as of December 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.

Forward-Looking Statements

This press release contains forward-looking statements based largely on current expectations of BBX Capital or its subsidiaries that involve a number of risks and uncertainties. All opinions, forecasts, projections, future plans or other statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements may be identified by the use of words or phrases such as "plans," "believes," "will," "expects," "anticipates," "intends," "estimates," "our view," "we see," "would" and words and phrases of similar import. The forward-looking statements in this press release are also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We can give no assurance that such expectations will prove to have been correct. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements contained herein. Forward-looking statements are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control and the reader should not place undue reliance on any forward-looking statement, which speaks only as of the date made. This press release also contains information regarding the past performance of the Company, its subsidiaries and their respective investments and operations, and the reader should note that prior or current performance is not a guarantee or indication of future performance. Future results could differ materially as a result of a variety of risks and uncertainties. Some factors which may affect the accuracy of the forward-looking statements apply generally to the industries in which the Company operates, including the resort development and vacation ownership industries in which Bluegreen operates, the residential and commercial real estate industry in which BBXRE operates, the sugar and confectionery industry in which BBX Sweet Holdings operates, and the home improvement industry in which Renin operates. Risks and uncertainties include, without limitation, the risks and uncertainties affecting BBX Capital and its subsidiaries, and their respective results, operations, markets, products, services and business strategies, including risks associated with the ability to successfully implement currently anticipated plans and generate earnings, long term growth, and increased value; the risk that BBX Capital's efforts to streamline its businesses and reduce losses may not be successful or achieve the anticipated or desired benefits; the performance of entities of which BBX Capital has acquired or in which it has made investments may not be profitable or perform as anticipated; the risk that BBX Capital is dependent upon dividends from its subsidiaries, principally Bluegreen, to fund its operations and that its subsidiaries may not be in a position to pay dividends at current levels, if at all, dividend payments may be subject to certain restrictions, including restrictions contained in debt instruments, and may be subject to declaration by such subsidiary's board of directors or managers; the risks relating to acquisitions, including acquisitions in diverse activities, including the risk that they will not perform as expected and will adversely impact the Company's results; risks relating to the monetization of BBX Capital's assets; and risks related to litigation and other legal proceedings involving BBX Capital and its subsidiaries. The Company's investment in Bluegreen Vacations Corporation exposes the Company to risks of Bluegreen's business including risks relating to its ability to increase VOI sales and profitability and risks inherent in the vacation ownership industry, risks relating to its operations, its relationships with its strategic partners and its ability to successfully grow new marketing partnerships and alliances, risks that Bluegreen's marketing alliances will not contribute to growth or be profitable, risks that the expansion of the Bass Pro/Cabela's marketing channels will not be successful or occur as anticipated; as well as other risks relating to the ownership of Bluegreen's common stock, including those described in Bluegreen's Annual and Quarterly Reports filed with the SEC. In addition, with respect to BBX Capital Real Estate, BBX Sweet Holdings, Renin, and its other investments in operating businesses, the risks and uncertainties include risks relating to the real estate market and real estate development, the risk that joint venture partners may not fulfill their obligations and the projects may not be developed as anticipated or be profitable, risks related to the concentration of investments with the same joint venture partner, and the risk that contractual commitments may not be completed on the terms provided or at all; risks relating to acquisition and performance of operating businesses, including integration risks, risks regarding achieving profitability, foreign currency transaction risk, goodwill and other intangible impairment risks, risks relating to restructurings and restated charges, and the risk that assets may be disposed of at a loss. In addition, the recent coronavirus could cause disruptions in our supply chain, decreased demand for products, declines in leisure travel and traffic at retail locations, impact the availability of credit, or otherwise adversely impact our financial condition and operations results. Reference is also made to the other risks and uncertainties described in BBX Capital's Annual Report on Form 10-K for the year ended December 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. The Company cautions that the foregoing factors are not exclusive, and that the reader should not place undue reliance on any forward-looking statement, which speaks only as of the date made.

The following supplemental table presents BBX Capital's Consolidating Statement of Operations (unaudited) for the three months ended December 31, 2019 (in thousands):

The following supplemental table presents BBX Capital's Consolidating Statement of Operations (unaudited) for the three months ended December 31, 2018 (in thousands):

The following supplemental table presents BBX Capital's Consolidating Statement of Operations (unaudited) for the year ended December 31, 2019 (in thousands):

The following supplemental table presents BBX Capital's Consolidating Statement of Operations (unaudited) for the year ended December 31, 2018 (in thousands):

The following supplemental table presents Bluegreen's System-wide sales of VOIs ⁽¹⁾ and a reconciliation of Bluegreen's Sales of VOIs to its System-wide sales of VOIs (unaudited) (in thousands):

The following supplemental table presents BBX Capital's free cash flow ⁽²⁾ and a reconciliation of cash flow from operating activities to free cash flow (unaudited) (in thousands):

The following supplemental table presents Bluegreen's free cash flow ⁽²⁾ and a reconciliation of Bluegreen's cash flows from operating activities to its free cash flow (unaudited) (in thousands):

The following supplemental table presents BBX Capital's EBITDA and Adjusted EBITDA ⁽³⁾ and a reconciliation of BBX Capital's net income to its EBITDA and Adjusted EBITDA (unaudited) (in thousands):

The following supplemental table presents Bluegreen's EBITDA and Adjusted EBITDA⁽³⁾ and a reconciliation of Bluegreen's net income to its EBITDA and Adjusted EBITDA (unaudited) (in thousands):

The following supplemental table presents BBX Sweet Holdings' EBITDA and Adjusted EBITDA ⁽³⁾ and a reconciliation of BBX Sweet Holdings' net loss to its EBITDA and Adjusted EBITDA (unaudited) (in thousands):

The following supplemental table presents Renin's EBITDA and Adjusted EBITDA ⁽³⁾ and a reconciliation of Renin's net income to its EBITDA and Adjusted EBITDA (unaudited) (in thousands):

 

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