February 25, 2024

Bluegreen Vacations Reports Financial Results for Fourth Quarter and Full Year 2021

BOCA RATON, Fla., March 03, 2022–(BUSINESS WIRE)–Bluegreen Vacations Holding Corporation (NYSE: BVH) (OTCQX: BVHBB) (the…

BOCA RATON, Fla., March 03, 2022–(BUSINESS WIRE)–Bluegreen Vacations Holding Corporation (NYSE: BVH) (OTCQX: BVHBB) (the “Company” or “Bluegreen”) reported today its financial results for the quarter and full year ended December 31, 2021. The Company is a leading vacation ownership company that markets and sells vacation ownership interests (“VOIs”) and manages resorts in popular leisure and urban destinations.

Key Highlights for the Quarter Ended December 31, 2021:

  • Net income attributable to shareholders of $13.1 million.

  • Earnings Per Share (“EPS”) from continuing operations of $0.59.

  • Total revenues of $203.0 million compared to $151.2 million in the fourth quarter of 2020 and $183.9 million in the fourth quarter of 2019.

  • System-wide sales of VOIs of $166.6 million compared to $112.2 million in the fourth quarter of 2020 and $155.5 million in the fourth quarter of 2019.

  • Vacation packages sold of 53,721 compared to 43,631 in the fourth quarter of 2020 and 54,886 in the fourth quarter of 2019.

  • Vacation packages outstanding of 187,244 compared to 121,915 as of December 31, 2020 and 169,294 as of December 31, 2019.

  • Adjusted EBITDA of $31.0 million. (1)

  • The Company repurchased approximately 194,000 shares of its Common Stock for approximately $6.4 million.

Key Highlights for the Year Ended December 31, 2021:

  • Net income attributable to shareholders of $58.7 million.

  • EPS from continuing operations of $2.79.

  • Total revenues of $757.1 million compared to $519.5 million in the year ended December 31, 2020 and $737.8 million in the year ended December 31, 2019.

  • System-wide sales of VOIs of $617.6 million compared to $367.0 million in the year ended December 31, 2020 and $619.1 million in the year ended December 31, 2019.

  • Vacation packages sold of 211,364 compared to 131,963 in the year ended December 31, 2020 and 205,108 in the year ended December 31, 2019.

  • Adjusted EBITDA of $122.0 million.(1)

  • Free cash flow of $63.4 million. (2)

  • The Company repurchased approximately 1.2 million shares of its Common Stock for an aggregate purchase price of approximately $27.3 million.

(1)

See appendix for reconciliation to net income attributable to shareholders for each respective period.

(2)

See appendix for reconciliation to net cash provided by operating activities.

Alan B. Levan, Chairman and Chief Executive Officer of the Company, commented, “We are very pleased with Bluegreen’s results for the fourth quarter of 2021, which we believe reflect the continued success of our Bluegreen Renewal Program. The Program is part of our Company wide effort to revitalize sales, revenue growth and efficiency which resulted in an all-time record of system-wide sales of VOIs during the fourth quarter. System-wide sales grew 7% during the fourth quarter of 2021 compared to the fourth quarter of 2019 and 48% compared to the fourth quarter of 2020 when Bluegreen’s results were significantly adversely impacted by the COVID-19 pandemic. The record performance during the fourth quarter of 2021 was driven by increased guest tours and a higher sales volume per guest. We are also pleased to note that Bluegreen’s sales to new customers during the fourth quarter of 2021 represented 48% of system-wide sales of VOIs, an improvement in sales mix which we believe will support net owner growth in the future.”

“Bluegreen’s marketing to new customers generally begins with the sale of a vacation package to a prospect. We sold 53,721 vacation packages in the fourth quarter of 2021, compared to 43,631 in the fourth quarter of 2020 and 54,886 in the fourth quarter of 2019. We believe the slight decrease in vacation packages sold as compared to the fourth quarter of 2019 reflects the termination during 2020 of certain unprofitable programs as well as a challenging labor market, which impacted staffing levels at our kiosks.”

“We are very happy to see our owners’ continued enthusiasm for using the Bluegreen Vacation Club, as we experienced an overall occupancy rate during the fourth quarter of 2021 of approximately 81% at resorts with sales centers, an increase from the 70% occupancy we experienced in the fourth quarter of 2020 during the pandemic. The demand for resort stays by Bluegreen Vacation Club owners has been strong and we believe our core strategy of primarily offering a ‘drive-to’ network of resorts will continue to serve as a growth driver.”

“Our Resort Operations and Club Management segment continues to perform well, generating $20.0 million of Segment Adjusted EBITDA in the fourth quarter of 2021 as compared to $16.0 million in the fourth quarter of 2020 and $14.9 million in the fourth quarter of 2019. This 34% increase as compared to the fourth quarter of 2019 was driven by both a 12% increase in segment revenue and a 3% decrease in segment expense (included in Segment Adjusted EBITDA). We expect that this segment will continue to produce recurring EBITDA and free cash flow for us.”

“We generated net income from continuing operations attributable to shareholders of $13.1 million and $31.0 million of Adjusted EBITDA attributable to shareholders during the fourth quarter of 2021. While we are excited by our fourth quarter results and believe we are well positioned for continued progress towards our goals in 2022, we continue to monitor the status of COVID-19, including cases in the markets where we operate. In addition, labor availability has been a challenge in certain of our markets and we cannot predict the duration or severity of the impact of the pandemic and labor conditions on our operations in the future. However, our team remains focused on these challenges while we continue to strive to improve our operations,” Mr. Levan concluded.

Due to the volatility of results reflecting the varying impact of the COVID-19 pandemic during the periods, the Company has provided information for the fourth quarters of, and years ended, December 31, 2021, 2020 and 2019.

Financial Results

Adjusted EBITDA was $30.1 million for the quarter ended December 31, 2021, including $31.6 million generated by the Sales of VOIs and Financing Segment and $20.0 million produced by the Resort Operations and Club Management segment, partially offset by $20.6 million of corporate overhead and other expenses and $3.0 million of Adjusted EBITDA attributable to the non-controlling interest in Bluegreen/Big Cedar Vacations LLC, Bluegreen’s 51%-owned subsidiary. Please see the discussion of Segment Results below for further information.

Adjusted EBITDA was $122.0 million for the year ended December 31, 2021, including $138.1 million generated by the Sales of VOIs and Financing Segment and $78.9 million produced by the Resort Operations and Club Management segment, partially offset by $79.7 million of corporate overhead and other expenses and $13.4 million of Adjusted EBITDA attributable to the non-controlling interest in Bluegreen/Big Cedar Vacations LLC. Please see discussion of Segment Results below for further information.

Segment Results

(dollars in millions, except per guest and per transaction amounts)

Sales of VOIs and Financing Segment

For the Three Months Ended December 31

For the Years Ended December 31

2021

2020

2021 vs
2020
% Change

2019

2021 vs
2019
% Change

2021

2020

2021 vs
2020
% Change

2019

2021 vs
2019
% Change

System-wide sales of VOIs

$

166.6

$

112.2

48.5

%

$

155.5

7.1

%

$

617.6

$

367.0

68.3

%

$

619.1

(0.2

)%

Segment adjusted EBITDA

$

31.6

$

22.5

40.4

%

$

36.1

(12.5

)%

$

138.1

$

46.9

194.5

%

$

143.6

(3.8

)%

Provision for loan losses

17.7%

17.5%

20

bp

19.0%

(130

)bp

17.1%

24.7%

760

bp

17.9%

(80

)bp

Cost of VOIs sold

10.0%

8.0%

200

bp

6.2%

380

bp

8.3%

7.8%

50

bp

8.6%

(30

)bp

Financing revenue, net of financing expense

$

17.7

$

15.2

16.4

%

$

15.4

14.9

%

$

65.6

$

61.9

6.0

%

$

60.5

8.4

%

Key Data Regarding Bluegreen’s System-wide sales of VOIs

For the Three Months Ended
December 31,

For the Years Ended
December 31,

2021

2020

2021 vs
2020
% Change

2019

2021 vs
2019
% Change

2021

2020

2021 vs
2020
% Change

2019

2021 vs
2019
% Change

Number of total guest tours

57,796

37,779

53.0

%

56,662

2.0

%

213,599

120,801

76.8

%

235,842

(9.4

)%

Average sales price per transaction

$

18,929

$

17,213

10.0

%

$

15,359

23.2

%

$

17,696

$

16,586

6.7

%

$

15,307

15.6

%

Sales to tour conversion ratio

15.3%

17.3%

(200

)bp

18.0%

(270

)bp

16.4%

18.4%

(200

)bp

17.3%

(90

)bp

Sales volume per guest (“VPG”)

$

2,987

$

2,976

0.4

%

$

2,758

8.3

%

$

2,907

$

3,046

(4.6

)%

$

2,642

10.0

%

Selling and marketing expenses, as % of system-wide sales of VOIs

56.4%

55.1%

130

bp

53.4%

300

bp

54.8%

59.2%

(440

)bp

51.9%

290

bp

Provision for loan losses

17.7%

17.5%

20

bp

19.0%

(130

)bp

17.1%

24.7%

(760

)bp

17.9%

(80

bp

Cost of VOIs sold

10.0%

8.0%

200

bp

6.2%

380

bp

8.3%

7.8%

50

bp

8.6%

(30

)bp

System-wide sales of VOIs were $166.6 million and $112.2 million during the three months ended December 31, 2021 and 2020, respectively, and $617.6 million and $367.0 million during the years ended December 31, 2021 and 2020, respectively. Further, system-wide sales of VOIs for the fourth quarter of 2021 were 7% higher than system-wide sales of VOIs for the fourth quarter of 2019, the most recent fourth quarter prior to the COVID-19 pandemic. System-wide sales of VOIs are driven by the number of guests attending a timeshare sale presentation (a “guest tour”) and our ability to convert such guest tours into purchases of VOIs. The number of guest tours is driven by a combination of the number of existing owner guests Bluegreen has staying at a resort with a sales center and the number of new guests who agree to attend a sale presentation. System-wide sales of VOIs during the quarter and year ended December 31, 2020 were negatively impacted by Bluegreen’s temporary closure of its VOI sales centers and marketing operations from the last week of March 2020 through May 2020 in response to the COVID-19 pandemic. The number of guest tours was 2% higher and sales volume per guest or VPG, was 8% higher in the fourth quarter of 2021 as compared to the fourth quarter of 2019, which we believe reflects the success of the Bluegreen Renewal initiative.

Fee-based Sales Commission Revenue

Fee-based sales commission revenue was $31.4 million during the fourth quarter of 2021, which represented approximately 67% of fee-based VOI sales during the quarter. Fee-based VOI sales represented 28% of system-wide sales of VOIs during the quarter.

Fee-based sales commission revenue was $128.3 million during the year ended December 31, 2021, which represented approximately 67% of fee-based VOI sales for the year. Fee-based VOI sales represented 31% of system-wide sales of VOIs during the year ended December 31, 2021. Fee-based VOI sales are expected to be between 25%-27% of system-wide sales of VOIs for 2022.

Cost of VOIs Sold

In the fourth quarter of 2021, Cost of VOIs sold represented 10% of sales of VOIs compared to 8% in the fourth quarter of 2020. Cost of VOIs sold as a percentage of sales of VOIs varies between periods based on the relative costs of the specific VOIs sold in each period and the size of the point packages of the VOIs sold. The Cost of VOIs sold as a percentage of sales of VOIs increased during the quarter ended December 31, 2021, as compared to the fourth quarter of 2020, primarily due to the sale of relatively higher cost VOIs partially offset by increased secondary market inventory purchases.

Cost of VOIs sold represented 8% during both of the years ended December 31, 2021 and 2020. Cost of VOIs sold is expected to be between 10%-12% for 2022.

Selling and Marketing Expenses

For the Three Months Ended December 31

For the Years Ended December 31

2021

2020

2021 vs
2020
% Change

2019

2021 vs
2019
% Change

2021

2020

2021 vs
2020
% Change

2019

2021 vs
2019
% Change

Selling and marketing expenses, as a % of system-wide sales of VOIs

56.4

%

55.1

%

130

bp

53.4%

300

bp

54.8

%

59.2

%

(440

)bp

51.9%

290

bp

Number of Bass Pro and Cabela’s marketing locations

128

98

30.6

%

83

54.2

%

128

98

30.6

%

83

54.2

%

Number of vacation packages outstanding, beginning of the period (1)

174,496

134,619

29.6

%

163,205

6.9

%

121,915

169,294

(28.0

)%

163,100

(25.3

)%

Number of vacation packages sold

53,721

43,631

23.1

%

54,886

(2.1

)%

211,364

131,963

60.2

%

205,108

3.1

%

Number of vacation packages outstanding, end of the period (1)

187,244

121,915

53.6

%

169,294

10.6

%

187,244

121,915

53.6

%

169,294

10.6

%

(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 but purchased an additional vacation package.

Selling and marketing expenses were 56% of system-wide sales of VOIs during the 2021 fourth quarter as compared to 55% during the fourth quarter of 2020. Selling and marketing expenses were 55% of system-wide sales of VOIs during the year ended December 31, 2021 as compared to 59% during the year ended December 31, 2020. During the fourth quarter of 2021, Bluegreen opened marketing kiosks in four additional Cabela’s locations where Bluegreen has continued its efforts to market and sell discounted vacation packages. These and other mini-vacation marketing programs resulted in the sale of 53,721 vacation packages during the fourth quarter of 2021. As compared to the fourth quarter of 2019, this reflects a decrease of approximately 2% in vacation package sales, which we believe is due primarily to the termination during 2020 of certain unprofitable programs as well as a challenging labor market, which impacted staffing levels at our kiosks. The active pipeline of vacation packages increased to 187,244 at December 31, 2021 from 174,496 at September 30, 2021, based on new vacation package sales during the quarter, net of vacation packages used or expired. While there is no assurance that this will continue to be the case, historically, approximately 40%-42% of vacation packages resulted in a timeshare tour 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 15,000 vacation packages held by customers who already toured and purchased a VOI and have indicated they would tour again, as well as over 40,000 vacation packages that were purchased over 12 months prior to December 31, 2021. Bluegreen has several programs in place to attempt to reactivate those vacation packages to promote future travel and in turn potential future VOI sales.

As previously described, in response to the COVID-19 pandemic, Bluegreen temporarily ceased marketing activities from the last week of March 2020 through most of May 2020. During the year ended December 31, 2020, Bluegreen incurred $3.2 million in severance expense. In addition, during the three months and year ended December 31, 2020, Bluegreen incurred $0.8 million and $13.6 million, respectively, of payroll and benefits expenses relating to employees who were then on temporary furlough or reduced work hours as a result of the impact of the COVID-19 pandemic. There were no such severance or furlough expenses during the quarter or year ended December 31, 2021.

Selling and marketing expenses are expected to be between 53%-56% as a percentage of system-wide sales for 2022.

General & Administrative Expenses from Sales & Marketing Operations

General and administrative expenses representing expenses directly attributable to sales and marketing operations were $12.1 million and $36.7 million during the three months and year ended December 31, 2021, respectively, and $8.0 million and $27.3 million during the three months and year ended December 31, 2020, respectively. As a percentage of system-wide sales of VOIs, general and administrative expenses attributable to sales and marketing operations were 7% and 6% during the three months and year ended December 31, 2021, respectively, and 7% during the three months and year ended December 31, 2020. As a percentage of sales, general and administrative expenses attributable to sales and marketing operations are typically higher in the fourth quarter due to the fixed nature of certain costs and the lower seasonal volume typically experienced during the fourth quarter.

General and administrative expenses representing expenses directly attributable to sales and marketing operations are expected to be between 5%-7% as a percentage of system-wide sales for 2022.

Provision for Loan Losses

The provision for loan losses varies based on the amount of financed, non fee-based VOI sales during the period and Bluegreen’s estimates relating to the future performance on the notes receivable for existing and newly originated loans. The provision for loan losses as a percentage of gross sales of VOIs was approximately 18% during both the fourth quarter of 2021 and the fourth quarter of 2020. The provision for loan losses applied to new loans during the fourth quarter of 2021 was 26%, which was consistent with the prior year quarter.

The COVID-19 pandemic has at times had a material adverse impact on unemployment in the United States and economic conditions in general and the ongoing impact of the pandemic continues to be uncertain. There is no assurance that the allowance for loan losses will prove to be adequate.

Financing Revenue, net of Financing Expense

Interest income on VOI notes receivable increased 13% to $21.8 million in the fourth quarter of 2021 compared to $19.3 million in the fourth quarter of 2020, which was the result of a higher notes receivable balance due to increased sales of VOIs during the fourth quarter of 2021. Interest expense on receivable-backed notes payable decreased 15% to $3.6 million in the fourth quarter of 2021 compared to $4.2 million in the fourth quarter of 2020, primarily due to lower outstanding receivable-backed notes payable balances and a lower weighted-average cost of borrowings due to lower market interest rates.

Resort Operations and Club Management Segment

(dollars in millions)

For the Years Ended
December 31,

2021

2020

2021 vs
2020
% Change

2019

2021 vs
2019
% Change

2021

2020

2021 vs
2020
% Change

2019