Bluegreen Vacations(BVH) - 2022 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Unaudited consolidated financial statements for June 30, 2022, reflect total assets of $1.30 billion and six-month revenues of $430.6 million Consolidated Balance Sheets (Unaudited) Total assets increased to $1.30 billion as of June 30, 2022, with liabilities at $982.9 million and equity at $312.5 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total Assets | $1,295,335 | $1,210,512 | | Cash and cash equivalents | $222,076 | $140,225 | | Notes receivable, net | $482,647 | $446,322 | | Total Liabilities | $982,881 | $906,712 | | Receivable-backed notes payable - non-recourse | $379,858 | $340,154 | | Total Equity | $312,454 | $303,800 | Consolidated Statements of Operations and Comprehensive Income (Unaudited) Six-month revenues increased 27% to $430.6 million, with net income attributable to shareholders rising to $33.8 million Key Operating Results (in thousands, except per share data) | Metric | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $235,570 | $193,458 | $430,624 | $339,712 | | Net Income Attributable to Shareholders | $17,784 | $19,501 | $33,771 | $22,475 | | Diluted EPS | $0.87 | $0.93 | $1.63 | $1.12 | | Cash Dividends Declared per Share | $0.15 | $— | $0.15 | $— | Consolidated Statements of Equity (Unaudited) Total equity increased to $244.8 million by June 30, 2022, primarily due to net income, offset by stock repurchases and dividends - Key changes in equity for the six months ended June 30, 2022 include: - Net income: +$33.8 million (shareholder portion)[14] - Purchase and retirement of common stock: -$30.8 million[14] - Dividends paid: -$3.1 million[14] Consolidated Statements of Cash Flows (Unaudited) Operating cash flow reached $68.9 million for the six months ended June 30, 2022, with financing activities providing $20.2 million Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $68,924 | $53,269 | | Net cash used in investing activities | $(7,867) | $(8,229) | | Net cash provided by (used in) financing activities | $20,185 | $(39,381) | | Net increase in cash, cash equivalents and restricted cash | $81,242 | $5,659 | Notes to Condensed Consolidated Financial Statements (Unaudited) Notes detail accounting policies, business structure, and key events, including a $172.0 million VOI receivable-backed securitization in April 2022 - The company is a leading vacation ownership company that markets and sells VOIs and manages resorts, earning fees from sales, management services, and financing for qualified VOI purchasers[22] - In April 2022, Bluegreen completed a $172.0 million VOI receivable-backed securitization, using proceeds to repay other debt facilities and for general corporate purposes[53][54] - The company is involved in litigation with timeshare exit firms, attributing a rise in average annual default rates to 7.9% in Q2 2022 to their activities[80][81] - Subsequent to quarter end, in July 2022, the company purchased 46 units in Vail, Colorado for $18.6 million and declared a $0.15 per share quarterly cash dividend[110][111] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses strong VOI sales recovery, with six-month revenues up 27% to $430.6 million, detailing segment performance, liquidity, and key risks Consolidated Results of Operations Six-month total revenues increased 27% to $430.6 million, with net income attributable to shareholders rising to $33.8 million Consolidated Financial Highlights vs. Prior Year | Metric | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $430.6M | $339.7M | +27% | | Net Income to Shareholders | $33.8M | $22.5M | +50% | | Diluted EPS | $1.63 | $1.12 | +46% | - Performance in 2022 was significantly impacted by improved conditions post-COVID, leading to higher revenues, partially offset by lower gross profit margins from VOI sales and increased SG&A expenses[126] Reportable Segments Results of Operations Sales of VOIs and Financing segment saw 22% sales growth in Q2 2022, while Resort Operations and Club Management segment revenue increased 6% Adjusted EBITDA by Segment (in thousands) | Segment | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Sales of VOIs and financing | $37,368 | $38,320 | $73,105 | $59,456 | | Resort operations and club management | $20,920 | $19,034 | $41,470 | $37,259 | | Total Segment Adjusted EBITDA | $58,288 | $57,354 | $114,575 | $96,715 | Liquidity and Capital Resources The company maintains sufficient liquidity, supported by operations, VOI financing, and a $172.0 million securitization, with active share repurchases - BVH, the parent company, relies on distributions from Bluegreen to fund its operations and service its debt, including a $50.0 million note payable to BBX Capital[182][184][185] - Bluegreen's primary liquidity sources include cash sales, down payments, borrowings against VOI notes receivable, and fees from resort management[192] - In April 2022, Bluegreen completed a $172.0 million VOI receivable-backed securitization, using proceeds to repay other debt and for general corporate purposes[196][197] - The company repurchased $30.8 million of its stock in the first six months of 2022 and paid a quarterly dividend of $0.15 per share in Q2 2022[188][189] Item 3. Quantitative and Qualitative Disclosures About Market Risk Disclosure is not required due to the company's smaller reporting company status, with no material changes from the prior annual report - Disclosure is not required due to the company's smaller reporting company status[215] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal controls - The CEO and CFO concluded that as of June 30, 2022, the company's disclosure controls and procedures were effective[217] - No material changes were made to the company's internal control over financial reporting during the quarter ended June 30, 2022[218] PART II - OTHER INFORMATION Item 1. Legal Proceedings No material changes to legal proceedings were reported, with ongoing litigation including class actions and lawsuits against timeshare exit firms - There have been no material changes in legal proceedings, with details incorporated by reference from Note 9 of the financial statements[221] Item 1A. Risk Factors No material changes to the company's risk factors have occurred since the 2021 Annual Report on Form 10-K - No material changes to risk factors have occurred since the 2021 Annual Report on Form 10-K[222] Item 2. Unregistered sales of Equity Securities and Use of Proceeds The company continued its share repurchase program, buying back 917,390 shares for $26.1 million in Q2 2022, with $31.9 million remaining Share Repurchases for Q2 2022 | Period | Total Shares Purchased | Average Price Per Share | Total Cost (in millions) | | :--- | :--- | :--- | :--- | | April 2022 | 450,000 | $30.00 | $13.5 | | May 2022 | 217,853 | $25.74 | $5.6 | | June 2022 | 249,537 | $28.07 | $7.0 | | Total Q2 | 917,390 | $28.46 | $26.1 | - As of June 30, 2022, $31.9 million remained available for repurchases under the authorized program[224] - In July 2022, subsequent to quarter end, the company repurchased an additional 843,358 shares of Class A Common Stock for $23.6 million in a private transaction[224] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including securitization agreements, SOX certifications, and XBRL data files - Exhibits filed include agreements for the BXG Receivables Note Trust 2022-A securitization, Sarbanes-Oxley certifications, and XBRL interactive data files[229]