Bluegreen Vacations Holding Corporation (NYSE: BVH) (OTCQX:
BVHBB) (the “Company" or “Bluegreen”) reported today its financial
results for the quarter and year ended December 31, 2022.
Key Highlights as of and for the
Quarter Ended December 31, 2022:
- Net income attributable to shareholders from continuing
operations decreased 37% to $7.6 million from $12.2 million in the
prior year quarter. Excluding the charge relating to exiting of
certain marketing locations, net income attributable to
shareholders from continuing operations decreased 5% to $11.6
million during the fourth quarter of 2022.
- Diluted Earnings Per Share (“EPS”) from continuing operations
decreased 30% to $0.41 from $0.59 in the prior year quarter.
Excluding the charge relating to exiting of certain marketing
locations, diluted EPS from continuing operations increased 5% to
$0.61 during the fourth quarter of 2022.
- Total revenue increased 17% to $238.0 million from $203.0
million in the prior year quarter.
- System-wide sales of vacation ownership interests (“VOIs”)
increased 12% to $186.5 million from $166.6 million in the prior
year quarter.(1)
- Number of guest tours increased 1% to 58,632 from 57,796 in the
prior year quarter.
- Vacation packages sold were 46,002 compared to 53,721 in the
prior year quarter, a decrease we believe reflected the continued
effects of a challenging labor market which affected staffing
levels and resulted in increased turnover.
- Vacation packages outstanding of 165,240 as of December 31,
2022 compared to 187,244 outstanding as of December 31, 2021.
- Resort operations and club management segment Adjusted EBITDA
increased 2% to $20.4 million from $20.0 million in the prior year
quarter.
- Adjusted EBITDA attributable to shareholders increased 4% to
$32.2 million from $31.0 million in the prior year quarter.
(2)
- The Company completed a cash tender offer pursuant to which it
purchased and retired 3,040,882 shares of its Class A Common Stock
at a purchase price of $25.00 per share for an aggregate purchase
price of $76.0 million.
Key Highlights for the Year Ended
December 31, 2022:
- Net income attributable to shareholders from continuing
operations increased 11% to $64.4 million from $57.8 million in the
prior year period. Excluding the fourth quarter 2022 charge
relating to exiting of certain marketing locations, net income
attributable to shareholders from continuing operations increased
19% to $69.4 million during 2022.
- Diluted EPS from continuing operations increased 16% to $3.24
from $2.79 in the prior year. Excluding the fourth quarter 2022
charge relating to exiting of certain marketing locations, diluted
EPS from continuing operations increased 25% to $3.47 during
2022.
- Total revenue increased 21% to $919.4 million from $757.1
million in the prior year.
- System-wide sales of VOIs increased 20% to $743.4 million from
$617.6 million in the prior year. (1)
- Number of guest tours increased 14% to 243,448 from 213,599 in
the prior year.
- Vacation packages sold were 168,982 compared to 211,364 in the
prior year.
- Resort operations and club management segment adjusted EBITDA
increased 6% to $83.8 million from $78.9 million in the prior
year.
- Adjusted EBITDA attributable to shareholders increased 15% to
$139.8 million from $122.0 million in the prior year. (2)
- Free cash flow was an outflow of $28.0 million compared to an
inflow of $63.4 million in 2021, primarily as a result of our $78.0
million acquisition of our newest resort, Bayside Resort & Spa
in Panama City Beach, Florida. (3)
(1)
See appendix for reconciliation of
system-wides sales of VOIs to gross sales of VOIs for each
respective period.
(2)
See appendix for reconciliation of
Adjusted EBITDA attributable to shareholders to net income
attributable to shareholders for each respective period.
(3)
See appendix for reconciliation of free
cash flow to net cash provided by operating activities.
Alan B. Levan, Chairman and Chief Executive Officer of Bluegreen
Vacations Holding Corporation, commented, “We believe our record
sales performance throughout 2022 is evidence that the appeal of
the Bluegreen Vacation Club to our target customer base is stronger
than ever. In the fourth quarter of 2022, our sales team generated
a fourth quarter record $186.5 million of system-wide sales of
VOIs, which was a 12% increase over the prior year quarter. The
increase reflected both an increase in our sales efficiency, as
demonstrated by the 7% increase in our sales volume per guest, and
a 1% increase in guest tours over the prior year quarter.”
“Our sales of VOIs are driven by the success of our marketing
programs, and Bluegreen’s marketing to new customers generally
begins with the sale of a vacation package to a prospect. During
the fourth quarter of 2022, we sold 46,002 vacation packages, a
decrease from the 53,721 we sold in the fourth quarter of 2021, a
decrease we believe reflected the continued effects of a
challenging labor market which affected staffing levels and
resulted in increased turnover and consequently impacted package
sales at our marketing kiosks. The decrease is also reflecting
lower traffic in the retail locations where we operate.”
“As we begin 2023, one of our objectives is to increase the
efficiency of our marketing spend and to accomplish this, we will
seek to increase our VOI sales and also lower our new customer
acquisition cost. In connection with this objective, in December
2022 we vacated certain marketing locations that were difficult to
staff and/or were under-performing. As a result, we incurred a
charge of $6.6 million, which we add back to Adjusted EBITDA.”
“Overall, the demand for vacations by Bluegreen Vacation Club
owners has been and remains strong and we believe our core strategy
of primarily offering a ‘drive-to’ network of resorts will continue
to serve as a growth driver.”
“However, we cannot predict the future impact of general
economic conditions, including higher interest rates, inflationary
trends, and labor availability, on our operations. From a balance
sheet perspective, we believe that we are well positioned to help
navigate various economic conditions with approximately $175.7
million of unrestricted cash on hand and $430.5 million of
conditional availability under our lines of credit and receivable
purchase facilities as of December 31, 2022. We also believe we
have a level of protection from rising interest rates as 42% of our
outstanding debt is at fixed interest rates. As always, we are
focused on growth and profitability over the long term, while at
the same time delivering memorable vacation experiences to our
owners,” Mr. Levan concluded.
Financial
Results
(dollars in millions, except per guest and
per transaction amounts)
Three Months Ended December
31,
Year Ended December
31,
2022
2021
Change
2022
2021
Change
Total revenue
$
238.0
$
203.0
17.2
%
$
919.4
$
757.1
21.4
%
Income before non-controlling interest and
provision for income taxes
$
17.8
$
25.0
(28.8)
%
$
107.4
$
98.6
8.9
%
Adjusted EBITDA Attributable to
Shareholders
$
32.2
$
31.0
3.9
%
$
139.8
$
122.0
14.6
%
Adjusted EBITDA Attributable to Shareholders was $32.2 million
for the quarter ended December 31, 2022, including $42.3 million
generated by the Sales of VOIs and Financing Segment and $20.4
million produced by the Resort Operations and Club Management
segment, partially offset by $25.5 million of corporate overhead
and other expenses and $5.0 million of Adjusted EBITDA attributable
to a third-party non-controlling interest in Bluegreen/Big Cedar
Vacations LLC.
Adjusted EBITDA Attributable to Shareholders was $139.8 million
for the full year 2022, including $159.3 million generated by the
Sales of VOIs and Financing Segment and $83.8 million produced by
the Resort Operations and Club Management segment, partially offset
by $86.2 million of corporate overhead and other expenses and $17.1
million of Adjusted EBITDA attributable to a third-party
non-controlling interest in Bluegreen/Big Cedar Vacations LLC.
Please see the discussion of Segment Results below for further
information.
Sales of VOIs and Financing
Segment
(dollars in millions, except per guest and
per transaction amounts)
For the Three Months Ended
December 31
For the Years Ended December
31
2022
2021
Q4 2022 vs Q4 2021 %
Change
2022
2021
YTD 2022 vs YTD 2021 %
Change
System-wide sales of VOIs
$
186.5
$
166.6
11.9
%
$
743.4
$
617.6
20.4
%
Segment adjusted EBITDA
$
42.3
$
31.6
33.9
%
$
159.3
$
138.1
15.4
%
Provision for loan losses
16.3%
17.7%
(140)
bp
15.8%
17.1%
(130)
bp
Cost of VOIs sold
10.1%
10.0%
10
bp
11.0%
8.3%
270
bp
Financing revenue, net of financing
expense
$
20.7
$
17.7
16.9
%
$
78.3
$
65.6
19.4
%
Key Data Regarding
Bluegreen’s System-wide sales of VOIs and Gross Profit
For the Three Months Ended
December 31,
For the Years Ended
December 31,
2022
2021
Q4 2022 vs Q4 2021 %
Change
2022
2021
YTD 2022 vs YTD 2021
%Change
System-wide sales of VOIs
$
186.5
$
166.6
11.9
%
$
743.4
$
617.6
20.4
%
Number of total guest tours
58,632
57,796
1.4
%
243,448
213,599
14.0
%
Average sales price per transaction
$
21,132
$
18,929
11.6
%
$
20,689
$
17,696
16.9
%
Sales to tour conversion ratio
15.1%
15.3%
(20)
bp
14.9%
16.4%
(150)
bp
Sales volume per guest ("VPG")
$
3,192
$
2,987
6.9
%
$
3,073
$
2,907
5.7
%
Provision for loan losses
16.3%
17.7%
(140)
bp
15.8%
17.1%
(130)
bp
Cost of VOIs sold
10.1%
10.0%
10
bp
11.0%
8.3%
270
bp
System-wide sales of VOIs increased 12% to $186.5 million during
the three months ended December 31, 2022 from $166.6 million for
the three months ended December 31, 2021. The number of guest tours
was 1% higher while sales volume per guest, or VPG, was 7% higher
in the fourth quarter of 2022 as compared to the fourth quarter of
2021. The VPG performance in the fourth quarter of 2022 was driven
by a 12% increase in average sales price per transaction, partially
offset by a 20 basis-point decrease in the sale-to-tour conversion
rate.
System-wide sales of VOIs increased 20% to a record $743.4
million during the year ended December 31, 2022 from $617.6 million
during the year ended December 31, 2021. The number of guest tours
was 14% higher while sales volume per guest, or VPG, was 6% higher
in the year ended December 31, 2022 as compared to the year ended
December 31, 2021. The VPG performance in 2022 was driven by a 17%
increase in average sales price per transaction, partially offset
by a 150 basis-point decrease in the sale-to-tour conversion
rate.
Fee-based Sales Commission
Revenue
VOI sales of third-party inventory, for which we earn a
commission, represented 12% and 14% of System-wide Sales of VOIs
during the fourth quarter and year ended December 31, 2022,
respectively. Fee-based sales commission revenue on such sales was
$15.5 million during the fourth quarter of 2022 and $72.6 million
for the full year of 2022, which represented a commission rate of
approximately 68% for both periods.
VOI sales of third-party inventory, for which we earn a
commission, are expected to be between 10% and 15% of system-wide
sales of VOIs in 2023.
Provision for Loan Losses
The provision for loan losses as a percentage of gross sales of
VOIs was approximately 16% during the fourth quarter of 2022 and
18% during the fourth quarter of 2021. The provision for loan
losses as a percentage of gross sales of VOIs was 16% during the
year ended December 31, 2022 and 17% during the year ended December
31, 2021. The change in the provision for loan losses during the
2022 periods as compared to the 2021 periods was primarily driven
by the change in the percentage of loans from existing owners
versus new owners and lower defaults experienced in 2022. The
provision for loan losses applied to new loans during the year
ended December 31, 2022 was 27%, an increase from 26% in the prior
year, due to the change in the percentage of loans from existing
owner versus new owners.
The provision for loan losses is expected to be between 16% and
18% of gross sales of VOIs for 2023.
Cost of VOIs Sold
Cost of VOIs sold represented 10% of sales of VOIs in both the
fourth quarter of 2022 and the fourth quarter of 2021. During the
year ended December 31, 2022, cost of VOIs sold represented 11% of
sales of VOIs compared to 8% during the year ended December 31,
2021. The cost of VOIs sold as a percentage of sales of VOIs
increased during 2022 as compared to 2021 primarily due to the
relative mix of inventory being sold in 2022, partially offset by
the timing of secondary market VOI purchases, which typically
results in lower cost of sales in the period that we purchase these
VOIs, and the reinstatement of certain equity trade programs in
2022.
Cost of VOIs sold is expected to be between 11% and 13% of sales
of VOIs in 2023.
Financing Revenue, net of Financing
Expense
Interest income on VOI notes receivable increased 24% to $27.0
million in the fourth quarter of 2022 compared to $21.8 million in
the fourth quarter of 2021 reflecting a higher balance of VOI notes
receivable. Interest expense on receivable-backed notes payable
increased 58% to $5.6 million in the fourth quarter of 2022
compared to $3.6 million in the fourth quarter of 2021, primarily
due to higher outstanding receivable-backed notes payable and an
increased weighted-average cost of borrowing reflecting increased
interest rates.
Interest income on VOI notes receivable increased 21% to $98.0
million in during the year ended December 31, 2022 compared to
$81.3 million during the year ended December 31, 2021 reflecting a
higher balance of VOI notes receivable. Interest expense on
receivable-backed notes payable increased 16% to $17.9 million
during the year ended December 31, 2022 compared to $15.5 million
during the year ended December 31, 2021, primarily due to higher
outstanding receivable-backed notes payable and an increased
weighted-average cost of borrowing reflecting increased interest
rates.
Selling and
Marketing Expenses
For the Three Months Ended
December 31
For the Years Ended
December 31
2022
2021
Q4 2022 vs Q4 2021 %
Change
2022
2021
YTD 2021 vs YTD 2020 %
Change
Percentage of sales to new owners
45.8%
47.7%
(190)
bp
46.0%
45.9%
10
bp
Number of Bass Pro and Cabela's marketing
locations (2)
129
128
0.8
%
129
128
0.8
%
Number of total guest tours
58,632
57,796
1.4
%
243,448
213,599
14.0
%
Number of vacation packages sold
46,002
53,721
(14.4)
%
168,982
211,364
(20.1)
%
Number of vacation packages outstanding,
end of the period (1)
165,240
187,244
(11.8)
%
165,240
187,244
(11.8)
%
(1)
Excludes vacation packages sold to
customers more than one year prior to the period presented and
vacation packages sold to customers who had already toured and
purchased.
(2)
As of January 1, 2023, 23 of our Cabela’s
marketing locations were converted to unmanned, virtual kiosks.
Selling and marketing expenses increased 17% in the fourth
quarter of 2022 compared to the fourth quarter of 2021. The
increase in selling and marketing expenses is due to increased
selling commissions associated with the 12% increase in system-wide
sales, higher cost per tour and higher expenses relating to the
fulfillment of a greater number of guest tours in the period, the
cost of expanded marketing operations and the costs of $6.6 million
incurred in connection with the reorganization of Bluegreen’s
retail marketing operations including the elimination of lower
performing marketing programs at various locations. To a lesser
extent, selling and marketing expenses were also impacted by
start-up costs associated with preparing for the start of sales
operations at Bluegreen’s Bayside Resort & Spa, in Panama City
Beach, FL, where we commenced VOI sales in January 2023.
Bluegreen’s vacation marketing programs sold 46,002 vacation
packages during the fourth quarter of 2022. This reflects a
decrease of approximately 14% in vacation package sales as compared
to the fourth quarter of 2021, which we believe was due primarily
to the challenging labor market, which impacted staffing levels and
turnover at our marketing kiosks, lower traffic in the retail
locations where we operate, as well as certain changes to our
package program in an effort to improve the quality of the
packages. For the year ended December 31, 2022, vacation packages
sold decreased 20% to 168,982 from 211,364 for the year ended
December 31, 2021. The active pipeline of vacation packages
decreased to 165,240 at December 31, 2022 from 187,244 at December
31, 2021, based on vacation packages used or expired net of new
vacation package sales. While there is no assurance that this will
continue to be the case, historically, approximately 40%-42% of
vacation packages resulted in guest tours at one of Bluegreen’s
resorts with a sales center within twelve months of purchase. In
addition to this active pipeline, Bluegreen also has a pipeline of
approximately 15,800 vacation packages held by customers who
already toured and purchased a VOI and have indicated they would
tour again.
Selling and marketing expenses increased 25% during the year
ended December 31, 2022 compared to the year ended December 31,
2021, and represented 57% and 55% of system-wide sales of VOIs,
respectively. The increase in selling and marketing expenses is due
to the 20% increase in system-wide sales.
Selling and marketing expenses are expected to be between 53%
and 57% as a percentage of system-wide sales for 2023.
General & Administrative Expenses from
Sales & Marketing Operations
General and administrative expenses representing expenses
directly attributable to sales and marketing operations increased
6% to $12.8 million during the fourth quarter of 2022 from $12.1
million during the fourth quarter of 2021, respectively. As a
percentage of system-wide sales of VOIs, general and administrative
expenses attributable to sales and marketing operations were 7% in
both the fourth quarter of 2022 and the fourth quarter of 2021.
General and administrative expenses representing expenses
directly attributable to sales and marketing operations increased
37% to $50.2 million during the year ended December 31, 2022 from
$36.7 million during the year ended December 31, 2021. As a
percentage of system-wide sales of VOIs, general and administrative
expenses attributable to sales and marketing operations were 7% in
the year ended December 31, 2022 and were 6% in the year ended
December 31, 2021.
In 2022, the increase in general and administrative expenses
attributable to sales and marketing operations reflects increased
compensation costs due to expansion of our sales and marketing
support operations in anticipation of expected future sales
growth.
General and administrative expenses representing expenses
directly attributable to sales and marketing operations as a
percentage of sales are expected to be between 5% and 8% as a
percentage of system-wide sales in 2023.
Resort Operations and Club Management
Segment
(dollars in millions)
For the Three Months Ended
December 31,
For the Years Ended December
31,
2022
2021
Q4 2022 vs Q4 2021 %
Change
2022
2021
YTD 2022 vs YTD 2021 %
Change
Resort operations and club management
revenue
$
52.4
$
47.1
11.3
%
$
195.6
$
180.3
8.5
%
Segment Adjusted EBITDA
$
20.5
$
20.0
2.5
%
$
83.8
$
78.9
6.2
%
Resorts managed
50
49
2.0
%
50
49
2.0
%
The increases in the fourth quarter and full year 2022 Resort
operations and club management revenue and Adjusted EBITDA
primarily reflect an increase in management fees reflecting higher
HOA resort operating costs and an additional resort management
contract, partially offset by higher labor cost of providing such
services.
Corporate Overhead, Administrative Expenses and Interest
Expense
Corporate General and Administrative
Expenses
General and administrative expenses increased 40% to $30.3
million during the fourth quarter of 2022 from $21.6 million during
the fourth quarter of 2021. General and administrative expenses
increased 12% to $101.3 million from $90.9 million during the years
ended December 31, 2022 and December 31, 2021, respectively. The
increase during 2022 as compared to 2021 was primarily due to
higher legal expenses associated with litigation and higher
information technology costs.
Interest Expense
Interest expense not related to receivable-backed debt was $8.4
million and $4.5 million during the fourth quarters of 2022 and
2021, respectively. Interest expense not related to
receivable-backed debt was $25.0 million and $19.8 million during
the years ended December 31, 2022 and 2021, respectively. These
increases were primarily due to an increase in outstanding debt and
a higher weighted average cost of borrowing due to increased
interest rates in the 2022 periods.
Class A Common Stock Cash Tender Offer
In November 2022, the Company commenced a cash tender offer to
purchase up to 4,500,000 shares of its Class A Common Stock. The
tender offer expired at 5:00 P.M., Eastern time, on Friday,
December 23, 2022, and a total of 3,040,882 shares of Bluegreen’s
Class A Common Stock were purchased for an aggregate price of
approximately $76.0 million ($25.00 per share), excluding fees and
expenses relating to the tender offer. The shares purchased
represented approximately 18.9% of the then issued and outstanding
shares of Bluegreen’s Class A Common Stock and 15.4% of the
aggregate number of issued and outstanding shares of Bluegreen’s
Class A Common Stock and Class B Common Stock. The shares purchased
in the tender offer were canceled by the Company.
Additional Information
For more complete and detailed information regarding the Company
and its financial results, please see the Company’s Annual Report
on Form 10-K for the year ended December 31, 2022, which is
expected to be filed with the SEC on or about March 13, 2023 and
will be available on the SEC's website, https://www.sec.gov, and on
the Company’s website, www.BVHCorp.com.
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.
About Bluegreen
Vacations:
Bluegreen Vacations Holding Corporation (NYSE: BVH; OTCQX:
BVHBB) 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, deeded vacation ownership plan with 69 Club
and Club Associate Resorts and access to nearly 11,400 other hotels
and resorts through partnerships and exchange networks. The Company
also offers a portfolio of comprehensive, fee-based resort
management, financial, and sales and marketing services to, or on
behalf of, third parties.
For further information, please visit
us at:
Bluegreen Vacations Holding Corporation: www.BVHCorp.com
Forward Looking
Statements
Certain statements in this press release are "forward-looking
statements" within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements, other than statements of
historical fact, are forward-looking statements. Forward-looking
statements are based on current expectations of management and can
be identified by the use of words such as “believe”, “may”,
“could”, “should”, “plans”, “anticipates”, “intends”, “estimates”,
“expects”, and other words and phrases of similar import.
Forward-looking statements involve risks, uncertainties, and other
factors, many of which are beyond our control, that may cause
actual results or performance to differ from those set forth or
implied in the forward-looking statements. These risks and
uncertainties include, without limitation, the risk that the
Company is a holding company and, accordingly, will be largely
dependent on dividends from Bluegreen to fund its expenses and
obligations in future periods, and Bluegreen’s ability to pay
dividends will depend on its results and may be limited by the
terms of Bluegreen’s indebtedness; risks regarding the amount of
shares, if any, which may be repurchased by the Company in the
future, the benefits to the Company, if any, of repurchasing
shares, the timing of any share repurchases, and the availability
of funds for the repurchase of shares; the risk that quarterly
dividend payments may not be declared at the current level in the
future, on a regular basis as anticipated, or at all; risks
relating to Bluegreen’s business, operations, financial results,
business strategy and prospects; risks related to public health,
general economic conditions, including increasing interest rates,
inflationary trends, a potential recession and supply chain issues,
and our ability to successfully navigate any adverse condition;
competitive conditions; labor market conditions, including costs
and shortages of labor, and its impact on Bluegreen’s operations
and sales; risks related to changes made to our vacation package
programs and their impact on sales, including that the retail
marketing reorganization may not result in the benefits
anticipated; risks related to our investments in sales and
marketing efforts and infrastructure, including their impact on our
cash flow and the risk that they may not result in the benefits
anticipated; risks related to resort acquisitions and our pursuit
of acquisition and development opportunities, including that
acquired resorts may not open when planned, the costs and risks of
development and renovation activities, including potential
construction delays and environmental issues, that we may not be
successful in identifying or consummating acquisition or
development opportunities in the future, and that acquired or
developed resorts may not be successfully operated or result in the
benefits anticipated; risks relating to our liquidity and the
availability of capital; the risk that our allowance for loan
losses may not be adequate and, accordingly, may need to be
increased in the future, including if Bluegreen’s default rates
increase and exceed expectations; risks related to Bluegreen’s
efforts to address the actions of timeshare exit firms and the
increase in default rates associated therewith are not successful,
or otherwise; risks related to our indebtedness, including the
potential for accelerated maturities and debt covenant violations;
the impact of public health and general economic conditions,
including inflation, on Bluegreen’s consumers, including their
income and level of discretionary spending, and on consumer traffic
at retail locations; the risk that our core strategy of primarily
offering a ‘drive-to’ network of resorts will not continue to serve
as a growth driver; the risk that resort operations and club
management segment may not continue to produce recurring EBITDA and
free cash flow; risks that Bluegreen’s current or future marketing
alliances and arrangements, including its marketing arrangements
with Bass Pro and the Choice Hotels program, may not be renewed and
will expire pursuant to their terms; the risk that vacation package
sales, including those in the pipeline, may not convert to tours
and/or VOI sales at anticipated or historical rates; the risk that
efforts to reactivate older vacation packages which have not been
used may not be successful; the risk that resort occupancies may
not continue at current or historical levels or meet expectations;
our ability to successfully implement strategic plans and
initiatives, generate earnings and long-term growth may not result
in increased sales, revenues or efficiencies, or otherwise be
successful; risks that construction defects, structural failures or
natural disasters at or in proximity to Bluegreen’s resort; risks
related to expansion of the resort network in existing and to new
locations, including that such expansion may not be successful and
may increase the Company’s debt and decrease the Company’s free
cash flow; risks related to the mix of sales to new customers and
existing owners, including that the level of sales to new customers
may not be increased or maintained, or support net owner growth in
the future; and the additional risks and uncertainties described in
the Company's filings with the SEC, including, without limitation,
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2022 (including the “Risk Factors” section thereof),
which is expected to be filed on March 13, 2023. The Company
cautions that the foregoing factors are not exclusive. You should
not place undue reliance on any forward-looking statement, which
speaks only as of the date made. The Company does not undertake,
and specifically disclaims any obligation, to update or supplement
any forward-looking statements. In addition, past performance may
not be indicative of future results.
BLUEGREEN VACATIONS HOLDING
CORPORATION
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
December 31,
December 31,
2022
2021
ASSETS
Cash and cash equivalents
$
175,683
$
140,225
Restricted cash ($19,461 and $15,956 in
VIEs at December 31, 2022 and 2021, respectively)
50,845
42,854
Notes receivable
763,801
609,429
Less: Allowance for loan loss
(211,311
)
(163,107
)
Notes receivable, net ($354,403 and
$248,873 in VIEs at December 31, 2022 and 2021, respectively)
552,490
446,322
Vacation ownership interest ("VOI")
inventory
389,864
334,605
Property and equipment, net
85,915
87,852
Intangible assets, net
61,293
61,348
Operating lease assets
22,963
33,467
Prepaid expenses
23,833
25,855
Other assets
35,499
37,984
Total assets
$
1,398,385
$
1,210,512
LIABILITIES AND EQUITY
Liabilities
Accounts payable
$
21,389
$
14,614
Deferred income
15,675
13,690
Accrued liabilities and other
110,048
100,131
Receivable-backed notes payable -
recourse
20,841
22,500
Receivable-backed notes payable -
non-recourse (in VIEs)
440,781
340,154
Note payable to BBX Capital, Inc.
50,000
50,000
Other notes payable and borrowings
218,738
97,125
Junior subordinated debentures
136,011
134,940
Operating lease liabilities
27,716
37,870
Deferred income taxes
113,193
95,688
Total liabilities
1,154,392
906,712
Commitments and contingencies (See Note
12)
Equity
Preferred Stock of $0.01 par value;
authorized 10,000,000 shares
—
—
Class A Common Stock of $0.01 par value;
authorized 30,000,000 shares; issued and outstanding 12,165,825 in
2022 and 17,118,392 in 2021
122
171
Class B Common Stock of $0.01 par value;
authorized 4,000,000 shares; issued and outstanding 3,664,117 in
2022 and 3,664,412 in 2021
37
37
Additional paid-in capital
46,821
173,909
Accumulated earnings
124,680
69,316
Total Bluegreen Vacations Holding
Corporation equity
171,660
243,433
Non-controlling interests
72,333
60,367
Total equity
243,993
303,800
Total liabilities and equity
$
1,398,385
$
1,210,512
BLUEGREEN VACATIONS HOLDING
CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except share
data)
For the Three Months Ended
December 31,
For the Years Ended December
31,
2022
2021
2022
2021
Revenue:
Gross sales of VOIs
$
163,861
$
119,918
$
636,156
$
426,556
Provision for loan losses
(26,642
)
(21,275
)
(100,431
)
(72,788
)
Sales of VOIs
137,219
98,643
535,725
353,768
Fee-based sales commission revenue
15,473
31,400
72,647
128,321
Other fee-based services revenue
33,357
32,195
131,910
123,454
Cost reimbursements
22,444
18,207
77,394
69,066
Interest income
28,233
21,905
99,739
81,691
Other income, net
1,240
653
2,014
813
Total revenues
237,966
203,003
919,429
757,113
Costs and Expenses:
Cost of VOIs sold
13,797
9,829
58,665
29,504
Cost of other fee-based services
16,715
14,310
58,447
58,812
Cost reimbursements
22,443
18,208
77,394
69,066
Interest expense
14,018
8,057
42,953
35,329
Selling, general and administrative
expenses
153,193
127,558
574,532
465,806
Other expense, net
—
—
—
—
Total costs and expenses
220,166
177,962
811,991
658,517
Income before income taxes
17,800
25,041
107,438
98,596
Provision for income taxes
(5,239
)
(9,807
)
(26,187
)
(26,664
)
Income from continuing operations
12,561
15,234
81,251
71,932
Benefit for income taxes
—
900
—
900
Net income from discontinued
operations
—
900
—
900
Net income
12,561
16,134
81,251
72,832
Less: Income attributable to
noncontrolling interests - continuing operations
4,912
3,004
16,866
14,102
Net income attributable to
shareholders
$
7,649
$
13,130
$
64,385
$
58,730
Basic earnings per share from continuing
operations
$
0.41
$
0.59
$
3.26
$
2.79
Basic earnings per share from discontinued
operations
—
0.04
—
0.04
Basic earnings per share (1)
$
0.41
$
0.63
$
3.26
$
2.83
Diluted earnings per share from continuing
operations
$
0.41
$
0.59
$
3.24
$
2.79
Diluted earnings per share from
discontinued operations
—
0.04
—
0.04
Diluted earnings per share (1)
$
0.41
$
0.63
$
3.24
$
2.83
Cash dividends declared per Class A and
B common shares
$
0.15
$
—
$
0.45
$
—
(1)
Basic and Diluted EPS are calculated the
same for both Class A and B common shares.
BLUEGREEN VACATIONS HOLDING
CORPORATION
ADJUSTED EBITDA ATTRIBUTABLE
TO SHAREHOLDERS RECONCILIATION
For the Three Months Ended
December 31,
For the Year Ended December
31,
(in thousands)
2022
2021
2022
2021
Net income attributable to its
shareholders
$
7,649
$
13,131
$
64,385
$
57,830
Net income attributable to the
non-controlling interest
continuing operations
4,912
3,004
16,866
14,102
Net Income
12,561
16,135
81,251
71,932
Add: Depreciation and amortization
4,351
3,975
15,889
15,653
Less: Interest income (other than interest
earned on
VOI notes receivable)
(1,219
)
(102
)
(1,710
)
(368
)
Add: Interest expense - corporate and
other
8,386
4,489
25,042
19,842
Add: Provision for income taxes
5,239
8,907
26,187
26,664
EBITDA
29,318
33,404
146,659
133,723
Add: Share - based compensation
expense
986
427
3,384
1,036
Loss on assets held for sale
262
182
230
158
Add: Severance and other
1,600
—
1,600
2,403
Add: Retail marketing reorganization
5,040
—
5,040
—
Adjusted EBITDA
37,206
34,013
156,913
137,320
Adjusted EBITDA attributable to the
non-controlling interest
(4,970
)
(3,035
)
(17,101
)
(15,286
)
Adjusted EBITDA attributable to
shareholders
$
32,236
$
30,978
$
139,812
$
122,034
The Company defines EBITDA as earnings, or net income, before
taking into account income tax, interest income (excluding interest
earned on VOI notes receivable), interest expense (excluding
interest expense incurred on debt secured by VOI notes receivable),
and depreciation and amortization. The Company defines Adjusted
EBITDA as EBITDA, adjusted to exclude amounts of loss (gain) on
assets held for sale, share-based compensation expense, and items
that the Company believes are not representative of ongoing
operating results, including severance costs and, for 2022, costs
related to the reorganization of certain resort marketing
operations. Adjusted EBITDA Attributable to Shareholders is
Adjusted EBITDA excluding amounts attributable to the
non-controlling interest in Bluegreen/Big Cedar Vacations (in which
Bluegreen owns a 51% interest). For purposes of the calculation of
EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to
Shareholders, no adjustments were made for interest income earned
on VOI notes receivable or the interest expense incurred on debt
that is secured by such notes receivable because they are both
considered to be part of the ordinary operations of the Company’s
business.
The Company considers EBITDA, Adjusted EBITDA, and Adjusted
EBITDA Attributable to Shareholders to be indicators of operating
performance, and they are used by the Company to measure its
ability to service debt, fund capital expenditures and expand its
business. EBITDA and Adjusted EBITDA are also used by companies,
lenders, investors and others because they exclude certain items
that can vary widely across different industries or among companies
within the same industry. For example, interest expense can be
dependent on a company’s capital structure, debt levels and credit
ratings. Accordingly, the impact of interest expense on earnings
can vary significantly among companies. The tax positions of
companies can also vary because of their differing abilities to
take advantage of tax benefits and because of the tax policies of
the jurisdictions in which they operate. As a result, effective tax
rates and provision for income taxes can vary considerably among
companies. EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable
to Shareholders also exclude depreciation and amortization because
companies utilize productive assets of different ages and use
different methods of both acquiring and depreciating productive
assets. These differences can result in considerable variability in
the relative costs of productive assets and the depreciation and
amortization expense among companies.
EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to
Shareholders are not recognized terms under GAAP and should not be
considered as an alternative to net income or any other measure of
financial performance or liquidity, including cash flow, derived in
accordance with GAAP, or to any other method or analyzing results
as reported under GAAP. The limitations of using EBITDA, Adjusted
EBITDA or Adjusted EBITDA Attributable to Shareholders as an
analytical tool include, without limitation, that EBITDA, Adjusted
EBITDA and Adjusted EBITDA Attributable to Shareholders do not
reflect (i) changes in, or cash requirements for, working capital
needs; (ii) interest expense, or the cash requirements necessary to
service interest or principal payments on indebtedness (other than
as noted above); (iii) tax expense or the cash requirements to pay
taxes; (iv) historical cash expenditures or future requirements for
capital expenditures or contractual commitments; or (v) the effect
on earnings or changes resulting from matters that the Company does
not believe to be indicative of future operations or performance.
Further, although depreciation and amortization are non-cash
charges, the assets being depreciated and amortized often have to
be replaced in the future, and EBITDA, Adjusted EBITDA and Adjusted
EBITDA Attributable to Shareholders do not reflect any cash that
may be required for such replacements. In addition, the Company’s
definition of Adjusted EBITDA or Adjusted EBITDA Attributable to
Shareholders may not be comparable to definitions of Adjusted
EBITDA, Adjusted EBITDA Attributable to Shareholders or other
similarly titled measures used by other companies.
BLUEGREEN VACATIONS HOLDING
CORPORATION
SYSTEM-WIDE SALES OF VOIs
RECONCILIATION (1)
For the Three Months Ended
December 31,
For the Year Ended
December 31,
(in thousands)
2022
2021
2022
2021
Gross sales of VOIs
$
163,861
$
119,918
$
636,156
$
426,556
Add: Fee-Based sales
22,593
46,641
107,238
191,054
Bluegreen's system-wide sales of VOIs
$
186,454
$
166,559
$
743,394
$
617,610
(1)
System-wide Sales of VOIs is a non-GAAP
measure and represents all sales of VOIs, whether owned by
Bluegreen or a third party immediately prior to the sale. Sales of
VOIs owned by third parties are transacted as sales of VOIs in the
Bluegreen Vacation Club through the same selling and marketing
process Bluegreen uses to sell its VOI inventory. The Company
considers system-wide sales of VOIs to be an important operating
measure because it reflects all sales of VOIs by its sales and
marketing operations without regard to whether Bluegreen or a third
party owned such VOI inventory at the time of sale. System-wide
sales of VOIs should not be considered as an alternative to sales
of VOIs or any other measure of financial performance derived in
accordance with GAAP or to any other method of analyzing results as
reported under GAAP.
BLUEGREEN VACATIONS HOLDING
CORPORATION
FREE CASH FLOW RECONCILIATION
(1)
For the Twelve Months Ended
December 31,
(in thousands)
2022
2021
Net cash (used in) provided by operating
activities
$
(12,893
)
$
76,966
Purchases of property and equipment
(15,098
)
(13,598
)
Free Cash Flow
$
(27,991
)
$
63,368
(1)
Free cash flow is a non-GAAP measure
defined as cash provided by operating activities less capital
expenditures for property and equipment. The Company focuses on the
generation of free cash flow and considers free cash flow to be a
useful supplemental measure of its ability to generate cash flow
from operations and is a supplemental measure of liquidity. Free
cash flow should not be considered as an alternative to cash flow
from operating activities as a measure of liquidity. The Company’s
computation of free cash flow may differ from the methodology used
by other companies. Investors are cautioned that items excluded
from free cash flow are a significant component in understanding
and assessing the Company’s financial performance.
BLUEGREEN VACATIONS HOLDING
CORPORATION
SALES OF VOIs AND FINANCING
SEGMENT- ADJUSTED EBITDA
For the Three Months Ended
December 31,
2022
2021
Amount
% of System- wide sales of
VOIs(5)
Amount
% of System- wide sales of
VOIs(5)
(dollars in thousands)
Bluegreen owned VOI sales (1)
$
163,861
88
$
119,918
72
Fee-Based VOI sales
22,593
12
46,641
28
System-wide sales of VOIs
186,454
100
%
166,559
100
%
Less: Fee-Based sales
(22,593
)
(12
)
(46,641
)
(28
)
Gross sales of VOIs
163,861
88
119,918
72
Provision for loan losses (2)
(26,642
)
(16
)
(21,275
)
(18
)
Sales of VOIs
137,219
74
98,643
59
Cost of VOIs sold (3)
(13,797
)
(10
)
(9,829
)
(10
)
Gross profit (3)
123,422
90
88,814
90
Fee-Based sales commission revenue (4)
15,473
68
31,400
67
Financing revenue, net of financing
expense
20,718
11
17,715
11
Other expense
—
0
(137
)
—
Other fee-based services, title operations
and other, net
2,073
1
2,461
1
Net carrying cost of VOI inventory
(5,731
)
(3
)
(4,412
)
(3
)
Selling and marketing expenses
(110,067
)
(59
)
(93,875
)
(56
)
General and administrative expenses -
sales and marketing
(12,828
)
(7
)
(12,104
)
(7
)
Operating profit - sales of VOIs and
financing
33,060
18
%
29,862
18
%
Add: Depreciation and amortization
2,281
1,605
Add: Loss on assets held for sale
270
137
Add: Severance and other
1,600
—
Add: Retail marketing reorganization
5,040
—
Adjusted EBITDA - sales of VOIs and
financing
$
42,251
$
31,604
(1)
Bluegreen owned sales represent sales of
VOIs acquired or developed by Bluegreen.
(2)
Percentages for provision for loan losses
are calculated as a percentage of gross sales of VOIs, which
excludes Fee-Based sales (and not as a percentage of system-wide
sales of VOIs).
(3)
Percentages for costs of VOIs sold and
gross profit are calculated as a percentage of sales of VOIs (and
not as a percentage of system-wide sales of VOIs).
(4)
Percentages for Fee-Based sales commission
revenue are calculated as a percentage of Fee-Based sales (and not
as a percentage of system-wide sales of VOIs).
(5)
Represents the applicable line item,
calculated as a percentage of system-wide sales of VOIs unless
otherwise indicated in the above footnotes.
BLUEGREEN VACATIONS HOLDING
CORPORATION
SALES OF VOIs AND FINANCING
SEGMENT- ADJUSTED EBITDA
For the Years Ended December
31,
2022
2021
Amount
% of System- wide sales of
VOIs(5)
Amount
% of System- wide sales of
VOIs(5)
(dollars in thousands)
Bluegreen owned VOI sales (1)
$
636,156
86
$
426,556
69
Fee-Based VOI sales
107,238
14
191,054
31
System-wide sales of VOIs
743,394
100
617,610
100
Less: Fee-Based sales
(107,238
)
(14
)
(191,054
)
(31
)
Gross sales of VOIs
636,156
86
426,556
69
Provision for loan losses (2)
(100,431
)
(16
)
(72,788
)
(17
)
Sales of VOIs
535,725
72
353,768
57
Cost of VOIs sold (3)
(58,665
)
(11
)
(29,504
)
(8
)
Gross profit (3)
477,060
89
324,264
92
Fee-Based sales commission revenue (4)
72,647
68
128,321
67
Financing revenue, net of financing
expense
78,281
11
65,569
11
Other expense
—
0
(145
)
0
Other fee-based services, title operations
and other, net
9,029
1
8,837
1
Net carrying cost of VOI inventory
(18,706
)
(3
)
(22,339
)
(4
)
Selling and marketing expenses
(423,007
)
(57
)
(338,269
)
(55
)
General and administrative expenses -
sales and marketing
(50,183
)
(7
)
(36,664
)
(6
)
Operating profit - sales of VOIs and
financing
145,121
20
%
129,574
21
%
Add: Depreciation and amortization
7,273
5,956
Add: Severance and other
1,600
2,403
Add: Retail marketing reorganization
5,040
—
Add: Loss on assets held for sale
270
145
Adjusted EBITDA - sales of VOIs and
financing
$
159,304
$
138,078
(1)
Bluegreen owned sales represent sales of
VOIs acquired or developed by Bluegreen.
(2)
Percentages for provision for loan losses
are calculated as a percentage of gross sales of VOIs, which
excludes Fee-Based sales (and not as a percentage of system-wide
sales of VOIs).
(3)
Percentages for costs of VOIs sold and
gross profit are calculated as a percentage of sales of VOIs (and
not as a percentage of system-wide sales of VOIs).
(4)
Percentages for Fee-Based sales commission
revenue are calculated as a percentage of Fee-Based sales (and not
as a percentage of system-wide sales of VOIs).
(5)
Represents the applicable line item,
calculated as a percentage of system-wide sales of VOIs unless
otherwise indicated in the above footnotes.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230313005020/en/
Bluegreen Vacations Holding Corporation
Contact Info Investor Relations: Leo Hinkley, Managing
Director, Investor Relations Officer Telephone: 954-399-7193 Email:
Leo.Hinkley@BVHcorp.com
Bluegreen Vacations (NYSE:BVH)
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