Source: BFC Financial Corporation
BFC Financial Corporation ("BFC" or the "Company") (OTCQB:
BFCF) (OTCQB:
BFCFB) reported financial results for the three and six month periods ended June 30, 2016.
Overview and Highlights:
BFC Selected Financial Data (Consolidated)Second Quarter 2016 Compared to Second Quarter 2015:
- Total consolidated revenues of $193.0 million vs. $191.0 million
- Net income attributable to BFC of $0.2 million vs. $84.3 million (1)
- Diluted earnings per share of $0.0 vs. $0.97
- "Free cash flow" (cash flow from operating activities less capital expenditures) was $23.4 million compared to $17.5 million
BFC Selected Financial Data (Consolidated)Six Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015:
- Total consolidated revenues of $358.6 million vs. $341.0 million
- Net income attributable to BFC of $5.7 million vs. $86.2 million (1)
- Diluted earnings per share of $0.07 vs. $0.99
- "Free cash flow" (cash flow from operating activities less capital expenditures) was $38.4 million compared to $10.0 million
(1) Net
income attributable to BFC for the three and six month ended June 30,
2015 included a benefit for income taxes of $92.3 million due to the
release of a portion of BFC's valuation allowance on its net deferred
tax asset.
As of June 30, 2016, BFC had total consolidated
assets of $1.4 billion, shareholders' equity attributable to BFC of
$385.0 million, and total consolidated equity of $495.9 million. At June
30, 2016, BFC's book value per share was $4.61 compared to $4.08 at
June 30, 2015.
"BFC and BBX Capital Corporation ("BBX Capital" or "BBX") (NYSE:
BBX)
recently announced that they entered into a definitive merger agreement
between the companies. As discussed in more detail below, BFC has held a
meaningful stake in BBX since 1987, and if the proposed merger is
consummated, BBX will be a wholly owned subsidiary of BFC. The proposed
merger of BFC and BBX is anticipated to simplify our corporate structure
and intended to consolidate and streamline the combined companies. Also
discussed in more detail below, BFC announced that its Board declared a
quarterly cash dividend on BFC's Common Stock during the quarter and,
subject to declaration by the Board each quarter, anticipates paying
regular quarterly dividends in the future," commented Jarett S. Levan,
Acting Chairman and Chief Executive Officer of BFC Financial.
On
July 27, 2016, BFC and BBX Capital entered into a definitive merger
agreement between the companies. Under the terms of the merger
agreement, which was unanimously approved by a special committee
comprised of BBX's independent directors as well as the boards of
directors of both companies, BBX's shareholders other than BFC will be
entitled to receive, at their election, 5.4 shares of BFC's Class A
Common Stock or $20.00 in cash for each share of BBX's Class A Common
Stock held by them. BBX Capital's shareholders will have the right to
elect to make different elections with respect to different shares held
by them so they may elect to receive all cash, all stock, or a
combination of cash and stock in exchange for their shares. If the
merger is consummated, BBX will be a wholly owned subsidiary of BFC.
On
June 8, 2016, the Company announced that its Board of Directors had
declared a cash dividend payment of $0.005 per share on its Class A and
Class B Common Stock. The dividend was paid on July 20, 2016, to all
shareholders of record at the close of trading on June 20, 2016. BFC has
indicated its intention to, subject to declaration by its Board, pay
regular quarterly dividends of $0.005 per share on its Class A and Class
B Common Stock (an aggregate of $0.02 per share annually).
The
results of operations and financial condition of the companies in which
BFC holds a controlling financial interest, including BBX Capital
Corporation and Woodbridge Holdings, LLC ("Woodbridge"), the parent
company of Bluegreen, are consolidated in BFC's financial statements.
BFC currently holds an approximate 81% ownership interest in BBX
Capital. Woodbridge is owned 54% by BFC and 46% by BBX Capital.
Woodbridge's principal asset is its 100% ownership interest in
Bluegreen.
The following selected information relates to the
operating activities of Bluegreen and BBX Capital. See the supplemental
tables below for the consolidating statements of operations for the
three and six month periods ended June 30, 2016 and 2015.
Bluegreen Corporation
Bluegreen
is a sales, marketing, and management company focused on the vacation
ownership industry. Bluegreen markets, sells and manages vacation
ownership interests ("VOIs)" in resorts, which are generally located in
popular, high-volume, "drive-to" vacation destinations. The resorts in
which Bluegreen markets, sells or manages VOIs were either developed or
acquired by Bluegreen, or were developed and are owned by third parties.
Bluegreen earns fees for providing sales and marketing services to
these third party developers. Bluegreen also earns fees by providing
management services to the Bluegreen Vacation Club and property owners
associations ("POAs"), mortgage servicing, VOI title services,
reservation services, and construction design and development services.
In addition, Bluegreen provides financing to individual purchasers of
VOIs.
During the three month period ended June 30, 2016, Bluegreen
paid cash dividends of $15.0 million to Woodbridge, Bluegreen's parent
company, and Woodbridge in turn paid $7.6 million of cash dividends to
BFC and $6.5 million of cash dividends to BBX Capital. During the six
month period ended June 30, 2016, Bluegreen paid cash dividends of $25.0
million to Woodbridge, and Woodbridge in turn paid $12.6 million of
cash dividends to BFC and $10.7 million of cash dividends to BBX
Capital.
Bluegreen Selected Financial DataSecond Quarter 2016 Compared to Second Quarter 2015:
- System-wide sales of VOIs, net of equity trade allowances (2),
were $159.7 million vs. $139.9 million. Included in system-wide sales
are sales of VOIs made as part of Bluegreen's "capital-light" business
strategy(1), which were $125.8 million vs. $111.0 million, gross of equity trade allowances(2):
- Sales
of third party VOIs on a commission basis were $77.6 million vs. $70.9
million and generated sales and marketing commissions of $54.2 million
vs. $48.0 million
- Sales of secondary market VOIs were $26.8 million vs. $24.2 million
- Sales of just-in-time VOIs were $21.4 million vs. $15.9 million
- Average sales price per transaction was $13,293 versus $12,325
- Sales volume per guest averaged $2,239 vs. $2,328
- Tours increased 19% compared to prior year quarter
- Other fee-based services revenue was $26.1 million vs. $24.9 million
- Net
income attributable to Bluegreen was $14.0 million vs. $17.9 million.
Excluding special bonuses totaling $10.0 million paid to certain
employees, Bluegreen's net income would have been $20.1 million for the
three months ended June 30, 2016.
- EBITDA was $25.1 million vs. $32.2 million (3). Excluding the special bonuses discussed above, EBITDA would have been $35.1 million for the three months ended June 30, 2016.
- "Free cash flow" (cash flow from operating activities less capital expenditures) was $28.7 million compared to $18.2 million
Bluegreen Selected Financial DataSix Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015:
- System-wide sales of VOIs, net of equity trade allowances (2),
were $286.7 million vs. $249.1 million. Included in system-wide sales
are sales of VOIs made under Bluegreen's "capital-light" business
strategy(1), which were $224.4 million vs. $189.4 million, gross of equity trade allowances(2):
- Sales
of third party VOIs on a commission basis were $137.7 million vs.
$119.9 million and generated sales and marketing commissions of $94.3
million vs. $80.6 million
- Sales of secondary market VOIs were $61.0 million vs. $46.8 million
- Sales of just-in-time VOIs were $25.7 million vs. $22.7 million
- Average sales price per transaction was $13,265 vs. $12,390
- Sales volume per guest averaged $2,268 vs. $2,355
- Tours increased 21% compared to prior year period
- Other fee-based services revenue was $51.6 million vs. $48.7 million
- Net
income attributable to Bluegreen was $31.5 million vs. $33.9 million.
Excluding special bonuses totaling $10.0 million paid to certain
employees, Bluegreen's net income would have been $37.6 million for the
six months ended June 30, 2016.
- EBITDA was $55.5 million vs. $63.0 million (3). Excluding the special bonuses discussed above, EBITDA would have been $65.5 million for the six months ended June 30, 2016.
- "Free cash flow" (cash flow from operating activities less capital expenditures) was $60.0 million compared to $30.1 million
Bluegreen Summary for the Three and Six Months Ended June 30, 2016
System-wide
sales of VOIs were $159.7 million and $286.7 million during the three
and six months ended June 30, 2016, respectively, and $139.9 million and
$249.1 million during the three and six months ended June 30, 2015,
respectively. The growth in system-wide sales during the three and six
months ended June 30, 2016 is primarily attributable to an increase of
19% and 21%, respectively, in the number of total prospect tours, which
included an increase of 27% and 29%, respectively, in the number of new
prospect tours, and an increase of 8% and 7%, respectively, in the
average sales price per transaction. These increases were partially
offset by a decrease of 11% and 10%, respectively, in the sale to tour
conversion ratio for total prospects and a decrease of 11% and 9%,
respectively, in the sale to tour conversion ratio for new prospects.
Fee-based
sales commission revenue was $54.2 million and $48.0 million during the
three months ended June 30, 2016 and 2015, respectively, and $94.3
million and $80.6 million during the six months ended June 30, 2016 and
2015, respectively. The increase in the sales of third-party developer
inventory during the 2016 periods were due primarily to the factors
described above related to the increase in system-wide sales of VOIs. In
addition, Bluegreen earned an average sales and marketing commission of
70% and 69% during the three and six months ended June 30, 2016,
respectively, as compared to 68% and 67% during the three and six months
ended June 30, 2015, respectively. The increase in the second quarter
of 2016 included an incentive commission of $1.7 million earned as a
result of the achievement of certain sales thresholds pursuant to the
terms and conditions of the applicable contractual arrangement.
Other
fee-based services revenue increased 4% to $26.1 million for the three
months ended June 30, 2016 and 6% to $51.6 million for the six months
ended June 30, 2016. Fee-based management services revenues increased
during the 2016 periods compared to the 2015 periods primarily as a
result of cumulative increases in the number of owners in the Bluegreen
Vacation Club.
Net interest spread was $13.9 million and $12.6
million during the three months ended June 30, 2016 and 2015,
respectively, and $28.2 million and $22.0 million during the six months
ended June 30, 2016 and 2015, respectively. The increase in net interest
spread during the three and six months ended June 30, 2016 is primarily
due to additional interest income of $0.4 million and $2.4 million
recognized by Bluegreen during the three and six months ended June 30,
2016, respectively, related to an $80.0 million loan made to BFC during
April 2015.
Bluegreen generated "free cash flow" (cash flow from
operating activities less capital expenditures) of $60.0 million during
the six months ended June 30, 2016 compared to $30.1 million during the
six months ended June 30, 2015. The increase for the 2016 period is
primarily due to decreased spending on the acquisition and development
of inventory. During the first six months of 2016, Bluegreen paid $5.2
million for development expenditures primarily related to the
Bluegreen/Big Cedar Vacations Joint Venture, as compared to $19.7
million in the 2015 period. Additionally, Bluegreen paid $2.7 million
for Just-in-Time inventory purchases during the first six months of 2016
as compared to $9.9 million during the same 2015 period. This increase
was partially offset by the impact of a decrease in cash realized within
30 days of sale to 41% during the six months ended June 30, 2016 from
47% during the six months ended June 30, 2015.
BBX Capital Corporation
BBX
Capital is involved in the acquisition, ownership and management of
joint ventures and investments in real estate and real estate
development projects, as well as investments in and management of middle
market operating businesses, in each case directly or indirectly
through subsidiaries or joint ventures.
BBX Selected Financial DataSecond Quarter 2016 Compared to Second Quarter 2015:
- Total consolidated revenues of $24.0 million vs. $38.6 million
- Net loss attributable to BBX Capital of ($2.2) million vs. net income of $4.1 million
- Equity in income of Woodbridge Holdings, LLC of $5.1 million vs. loss of ($10.2) million
BBX Selected Financial DataSix Months Ended June 30, 2016 Compared to Six Months Ended June 30, 2015:
- Total consolidated revenues of $47.7 million vs. $60.3 million
- Net loss attributable to BBX Capital of ($2.5) million vs. net income of $5.2 million
- Diluted loss per share of ($0.15) vs. diluted earnings per share of $0.31
- Equity in income of Woodbridge Holdings, LLC of $11.8 million vs. net loss of ($4.4) million
As
of June 30, 2016, BBX Capital had total consolidated assets of $390.5
million, shareholders' equity attributable to BBX Capital of $335.5
million, and total consolidated equity of $337.4 million. At June 30,
2016, BBX Capital's book value per share was $20.47 vs. $19.63 at June
30, 2015.
For more detailed information regarding BBX Capital and
its financial results, business, operations and risks, please see BBX
Capital's financial results press release for the quarter ended June 30,
2016, BBX Capital's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2016, and BBX Capital's Annual Report on Form 10-K for the
year ended December 31, 2015, which are available to view on the SEC's
website,
www.sec.gov, and on BBX Capital's website,
www.BBXCapital.com.
For
more complete and detailed information regarding BFC and its financial
results, business, operations and risks, and Bluegreen Corporation,
please see BFC's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2016, and BFC's Annual Report on Form 10-K for the year ended
December 31, 2015, which are available on the SEC's website,
www.sec.gov, and on BFC's website,
www.BFCFinancial.com.
About BFC Financial Corporation:BFC (OTCQB:
BFCF) (OTCQB:
BFCFB) is a holding company whose principal holdings include an 81% ownership interest in BBX Capital Corporation (NYSE:
BBX)
and its indirect ownership interest in Bluegreen Corporation. BFC owns a
54% equity interest in Woodbridge, the parent company of Bluegreen. BBX
Capital owns the remaining 46% equity interest in Woodbridge. As of
June 30, 2016, BFC had total consolidated assets of $1.4 billion,
shareholders' equity attributable to BFC of $385.0 million, and total
consolidated equity of $495.9 million. BFC's book value per share at
June 30, 2016 was $4.61.
About Bluegreen Corporation:Founded
in 1966 and headquartered in Boca Raton, FL, Bluegreen is a sales,
marketing and resort management company, focused on the vacation
ownership industry and pursuing a capital-light business strategy.
Bluegreen manages, markets and sells the Bluegreen Vacation Club, a
flexible, points-based, deeded vacation ownership plan with more than
200,000 owners, 66 owned or managed resorts, and access to more than
4,500 resorts worldwide. Bluegreen also offers a portfolio of
comprehensive, turnkey, fee-based services, including resort management
services, financial services, and sales and marketing services, to or on
behalf of third parties.
About BBX Capital Corporation:BBX Capital (NYSE:
BBX)
is involved in the acquisition, ownership and management of joint
ventures and investments in real estate and real estate development
projects, as well as acquisitions, investments and management of middle
market operating businesses. In addition, BBX Capital and its
controlling shareholder, BFC Financial Corporation, have a 46% and 54%
respective ownership interest in Bluegreen Corporation. As a result of
their ownership interests, BBX Capital and BFC together own 100% of
Bluegreen. As of June 30, 2016, BBX Capital had total consolidated
assets of $390.5 million, shareholders' equity attributable to BBX
Capital of $335.5 million, and total consolidated equity of $337.4
million. BBX Capital's book value per share at June 30, 2016 was $20.47.
For further information, please visit our family of companies:BFC Financial Corporation:
www.BFCFinancial.comBluegreen Corporation:
www.BluegreenVacations.comBBX Capital:
www.BBXCapital.com
Additional Information and Where to Find it:BFC
will file with the SEC a Registration Statement on Form S-4 that will
include a prospectus of BFC and a proxy statement of BBX Capital
relating to the proposed merger between the companies discussed in this
press release. The proxy statement/prospectus will be sent to the
shareholders of BBX. Investors and shareholders will be able to obtain a
copy of the proxy statement/prospectus and other documents filed with
the SEC containing information about BFC and BBX Capital free-of-charge
from the SEC's website at
www.sec.gov. Copies of documents filed with the SEC by BFC will be made available free-of-charge on BFC's website at
www.bfcfinancial.com,
under the "Investor Relations" tab, or by written request to BFC
Financial Corporation, 401 East Las Olas Boulevard, Suite 800, Fort
Lauderdale, Florida 33301, Attention: Investor Relations, or by phone at
954-940-4900. Copies of documents filed with the SEC by BBX Capital
will be made available free-of-charge on BBX Capital's website at
www.bbxcapital.com,
under the "Investor Relations" tab, or by written request to BBX
Capital Corporation, 401 East Las Olas Boulevard, Suite 800, Fort
Lauderdale, Florida 33301, Attention: Investor Relations, or by phone at
954-940-4000.
Investors and shareholders are advised to read
the proxy statement/prospectus when it is available because it will
contain important information.
BFC, BBX and certain of
their respective directors and executive officers may, under the rules
of the SEC, be deemed to be "participants" in the solicitation of
proxies from BBX's shareholders in connection with the proposed merger.
Information about the directors and executive officers of BFC is set
forth in BFC's Proxy Statement on Schedule 14A for its 2016 Annual
Meeting of Shareholders, which was filed with the SEC on April 28, 2016.
Information about the directors and executive officers of BBX Capital
is set forth in BBX Capital's Proxy Statement on Schedule 14A for its
2016 Annual Meeting of Shareholders, which was filed with the SEC on
April 25, 2016. These documents can be obtained free-of-charge from the
sources indicated above. Information concerning the interests of the
persons who may be considered "participants" in the solicitation will be
set forth in the proxy statement/prospectus relating to the merger when
it becomes available.
