BBX - BBX Capital Corporation Reports Financial Results For the First Quarter 2018

FORT LAUDERDALE, Fla., May 07, 2018 (GLOBE NEWSWIRE) -- BBX Capital Corporation (NYSE:BBX) (OTCQX:BBXTB) (“BBX Capital” or the “Company”) reported today its financial results for the quarter ended March 31, 2018.                                     

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

First Quarter 2018 Compared to First Quarter 2017:

• Total consolidated revenues of $218.0 million vs. $185.4 million, an increase of 17.6%
• Net income attributable to shareholders of $11.1 million vs. $17.4 million. Results for the first quarter of 2017 include $6.9 million in net gains recognized upon the cancellation of debt and a $9.6 million reduction to costs and expenses related to the resolution of the SEC civil litigation, including reimbursements of litigation costs and the release of a civil penalty held in escrow.
• Diluted earnings per share of $0.11 vs. $0.16
• Free cash flow outflows of $9.8 million vs. $1.1 million ⁽¹⁾

Balance Sheet as of March 31, 2018 Compared to December 31, 2017:

• Total consolidated assets of $1.6 billion was unchanged
• Total shareholders' equity of $599.0 million vs. $585.5 million
• Fully diluted book value per share of $5.68 vs. $5.63

“Since the sale of BankAtlantic in 2012, BBX Capital has focused on repositioning the Company and pursuing its goal of transitioning into a growth business by focusing on three verticals: Bluegreen Vacations, real estate investment opportunities, and the operating businesses we have acquired.  We believe our accomplishments over the years, throughout 2017 and the first quarter of 2018, reflect our goal of cultivating and building strong operating platforms within each vertical and at the parent company level,” commented Alan B. Levan, Chairman and Chief Executive Officer of BBX Capital. 

“As we have said in the past, BBX Capital’s goal is to build long-term shareholder value as opposed to focusing on quarterly or annual earnings, and our objective is to achieve long-term growth as measured by increases in book value and intrinsic value over time.  Using that metric, BBX Capital’s fully diluted book value per share, as of December 31, 2017, had increased 30% to $5.63, up from $4.32 on December 31, 2016, and as of March 31, 2018, fully diluted book value per share increased 25% to $5.68 per share, up from $4.54 per share on March 31, 2017. 

“Additionally, our stock price, as of March 31, 2018, had increased approximately 16% to $9.21, up from $7.97 on December 31, 2017.  We are pleased with our growth, progress and achievements and very much appreciate the continued support of our shareholders locally and globally,” Levan concluded.  

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, 2017, which is available on the SEC's website, https://www.sec.gov, and on BBX Capital’s website, www.BBXCapital.com, and BBX Capital’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, which will be available on the SEC's and BBX Capital’s websites upon filing with the SEC on or about May 8, 2018.

The following selected information relates to the operating activities of Bluegreen Vacations and BBX Capital’s Real Estate and Middle Market Divisions.

Bluegreen Vacations - Selected Financial Data

Selected highlights of Bluegreen Vacations’ financial results include:

First Quarter 2018 Compared to First Quarter 2017:

• Sales of VOIs of $56.1 million vs. $54.2 million
• System-wide sales of VOIs of $132.8 million vs. $129.6 million ⁽¹⁾
• Other fee-based services revenue of $28.0 million vs. $26.1 million
• Income before income taxes of $30.8 million vs. $30.9 million
• Adjusted EBITDA of $33.3 million vs. $32.0 million ⁽²⁾
• Free cash flow of $8.0 million vs. $4.1 million ⁽³⁾

In addition to BBX Capital’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, and its Annual Report on Form 10-K for the year ended December 31, 2017, more complete and detailed information regarding Bluegreen Vacations and its financial results, business, operations and risks can be found in Bluegreen Vacations’ press release reporting its financial results for the quarter ended March 31, 2018, and its filings with the SEC, which are 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 2018 Compared to First Quarter 2017:

• Revenues of $12.8 million vs. $1.5 million, an increase of 753%
• Recoveries from previously charged off loans of $4.8 million vs. $3.1 million
• Equity in earnings of unconsolidated real estate joint ventures of $1.3 million vs. $3.2 million
• Income before income taxes of $12.1 million vs. $5.3 million

During the quarter ended March 31, 2018, BBX Capital Real Estate continued its development of the Beacon Lakes Community in St. Johns County, Florida, with the closing of 83 developed lots to homebuilders resulting in $6.4 million in revenues and $2.2 million of pre-tax profits.  In addition, BBX Capital Real Estate generated significant income from its legacy asset portfolio during the quarter as a result of the repayment or settlement of commercial loans and the sale of a student housing complex held by it.

BBX Capital Middle Market - Selected Financial Data

BBX Capital Middle Market: Renin Holdings, LLC

Selected highlights of Renin Holdings, LLC’s (“Renin”) financial results include:

First Quarter 2018 Compared to First Quarter 2017:

• Trade sales of $15.0 million vs. $17.2 million, a decrease of 12.8%
• Gross margin of $2.8 million vs. $3.4 million
• Gross margin percentage of 18.9% vs. 19.5%
• Loss before income taxes of $30,000 vs. income before taxes of $0.7 million
• Adjusted EBITDA of $0.6 million vs $0.9 million ⁽¹⁾

During the quarter ended March 31, 2018, Renin’s operating performance was primarily impacted by a decline in sales associated with the loss of certain customers in its commercial channel, a decline in sales in its direct installation channel as a result of an increase in pricing in an effort to improve the channel’s profitability, and promotional marketing by a customer in its retail channel during 2017 that was not repeated in 2018.  Renin expects that increased sales in its retail channel, including e-commerce sales, during the remainder of 2018 will ultimately offset the impact of declining sales in its commercial and direct installation channels in 2018.

BBX Capital Middle Market: BBX Sweet Holdings

Selected highlights of BBX Sweet Holdings, LLC’s (“BBX Sweet Holdings”) financial results include:

First Quarter 2018 Compared to First Quarter 2017:

• Trade sales of $21.9 million vs. $6.1 million, an increase of 259.0%
• Gross margin of $7.2 million vs. $0.4 million
• Gross margin percentage of 32.9% vs. 6.2%
• Loss before income taxes of $4.7 million vs. a loss of $3.1 million

The significant increase in BBX Sweet Holdings’ revenues and gross margins primarily resulted from its acquisition of IT’SUGAR, a specialty candy retailer with 95 locations in 26 states and Washington, DC, in June 2017.  IT’SUGAR reported a loss before income taxes of $1.9 million for the quarter ended March 31, 2018, which it believes was primarily due to the seasonal nature of its sales.  In addition, BBX Sweet Holdings recognized $0.6 million in costs, including severance costs and impairments of property and equipment, in connection with the commencement of the exit of its manufacturing facility in Utah in 2018.  

BBX Capital Middle Market: MOD Pizza

Selected highlights of BBX Capital’s MOD Pizza franchise operations include:

• Opened a restaurant location in Coral Springs, Florida, during the quarter ended March 31, 2018, and an additional location in Kendall, Florida, in early April 2018.
• Continued to establish a pipeline of restaurant locations, with an expectation of opening four to six additional locations during the remainder of 2018.

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.

---

About BBX Capital Corporation: BBX Capital Corporation (NYSE:BBX) (OTCQX:BBXTB) is a Florida-based diversified holding company whose activities include its 90 percent ownership interest in Bluegreen Vacations Corporation (NYSE:BXG) as well as its real estate and middle market divisions. 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 212,000 owners, 67 Club and Club Associate Resorts and access to more than 11,000 other hotels and resorts through partnerships and exchange networks as of March 31, 2018. 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 90% owned by BBX Capital Corporation (NYSE:BBX) (OTCQX:BBXTB), a diversified holding company. For further information, visit www.BluegreenVacations.com.

BBX Capital Corporation Contact Info:
Investor Relations: Leo Hinkley, Managing Director, Investor Relations Officer
954-940-5300, Email: LHinkley@BBXCapital.com

Media Relations Contacts: Kip Hunter Marketing, 954-765-1329, Nicole Lewis / Elysia Volpe
Email: nicole@kiphuntermarketing.com, elysia@kiphuntermarketing.com

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 development, operation, management and investment in residential and commercial real estate, the resort development and vacation ownership industries in which Bluegreen operates, the home improvement industry in which Renin operates, and the sugar and confectionery industry in which BBX Sweet Holdings operates as well as the pizza franchise industry in which the Company recently commenced activities. 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 performance of entities in which BBX Capital has made investments may not be profitable or perform as anticipated; BBX Capital is dependent upon dividends from its subsidiaries, principally Bluegreen, to fund its operations; BBX Capital’s subsidiaries may not be in a position to pay dividends, 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 legacy 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 and risks inherent in the vacation ownership industry, 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’s Real Estate and Middle Market Division, 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, 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, the risk that new personnel will not be successful, foreign currency transaction risk, goodwill and other intangible impairment risks, and the risk that assets may be disposed of at a loss; and risks related to the Company’s MOD Pizza franchise activities, including that stores may not be opened when or in the number expected and that the stores once opened may not be profitable or otherwise perform as expected. Reference is also made to the other risks and uncertainties described in BBX Capital’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, and its Annual Report on Form 10-K for the year ended December 31, 2017.  The Company cautions that the foregoing factors are not exclusive.

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