BBX Capital Corporation Reports Financial Results For the Second Quarter, 2019

FORT LAUDERDALE, Fla.–(BUSINESS WIRE)–BBX Capital Corporation (NYSE: BBX), (OTCQX: BBXTB) (“BBX Capital” or the “Company”) reported today its financial results for the quarter ended June 30, 2019.

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

Second Quarter 2019 Compared to Second Quarter 2018:

• Total consolidated revenues of $251.3 million vs. $243.2 million
• Net (loss) income attributable to shareholders of ($11.6 million) vs. $6.5 million. Results for the second quarter of 2019 reflect a charge of $39.1 million as a result of Bluegreen’s settlement agreement with Bass Pro in June 2019
• Diluted (loss) earnings per share of ($0.12) vs. $0.07
• Free cash flow of $0.3 million vs. $2.3 million ⁽¹⁾
• Adjusted EBITDA of $33.1 million vs. $25.4 million ⁽²⁾

1. See the supplemental tables included in this release for a reconciliation of BBX Capital’s cash flow from operating activities to free cash flow. Free cash flow is defined as cash provided by operating activities less capital expenditures for property and equipment.
2. See the supplemental tables included in this release for a reconciliation of BBX Capital’s net income to adjusted EBITDA.

Balance Sheet as of June 30, 2019 Compared to December 31, 2018

• Total consolidated assets of $1.8 billion vs. $1.7 billion
• Total shareholders’ equity of $539.4 million vs. $549.6 million
• Fully diluted book value per share of $5.51 vs. $5.70 ⁽¹⁾

1. Fully diluted book value per share is stockholders’ equity divided by the number of Class A and Class B common shares outstanding plus unvested restricted stock awards as of period end

“BBX Capital’s results reflect a $39.1 million charge relating to the Bluegreen Vacations and Bass Pro settlement during the second quarter of 2019. We are pleased that Bluegreen and Bass Pro were able to resolve their differences, amend and expand their existing marketing agreement, and resume building on their very successful 19-year partnership. Moreover, we look forward to Bluegreen’s planned expansion of its retail marketing operations throughout additional Bass Pro and Cabela’s retail store locations which see an approximate 200 million visitors annually,” commented Alan B. Levan, Chairman and Chief Executive Officer of BBX Capital Corporation. “While the second quarter of 2019 was a challenging period for Bluegreen Vacations our other three segments performed well. Details are summarized below.

“As we have stated each quarter, since many of BBX Capital’s assets do not generate income on a regular or predictable basis, our objective continues to be long term growth as measured by increases in book value and intrinsic value over time. Our goal remains to streamline our business verticals so that our business model can be more easily analyzed and followed by the markets. To this end, we are continuing to review and evaluate the performance of our investments and consider transactions involving the sale or a spin-off of assets, investments or subsidiaries,” Levan concluded.

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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, 2018 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which will be available on the SEC’s website, https://www.sec.gov, and on BBX Capital’s website, www.BBXCapital.com, upon filing with the SEC.

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.

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The following selected information relates to the operating activities of Bluegreen Vacations, BBX Capital Real Estate, Renin, and IT’SUGAR.

Bluegreen Vacations – Selected Financial Data

Selected highlights of Bluegreen Vacations’ financial results include:

Second Quarter 2019 Compared to Second Quarter 2018:

• Sales of vacation ownership interests (“VOIs”) of $68.3 million vs. $68.6 million

• System-wide sales of VOIs of $163.6 million vs. $172.0 million ⁽¹⁾

• Other fee-based services revenue of $30.7 million vs. $30.4 million

• (Loss) income before income taxes of ($10.0 million) vs. $39.4 million

• Adjusted EBITDA of $28.7 million vs. $41.9 million ⁽²⁾

• Free cash flow was negative by $6.3 million vs. free cash flow of $0.1 million ⁽³⁾

1. See the supplemental tables included in this release for a reconciliation of Bluegreen’s Sales of VOIs to System-wide sales of VOIs.
2. See the supplemental tables included in this release for a reconciliation of Bluegreen’s net income to Adjusted EBITDA.
3. See the supplemental tables included in this release for a reconciliation of Bluegreen’s cash flow from operating activities to free cash flow.

In addition to BBX Capital’s Annual Report on Form 10-K for the year ended December 31, 2018, more complete and detailed information regarding Bluegreen Vacations and its financial results, business, operations, and risks can be found in Bluegreen Vacations’ Annual Report on Form 10-K for the year ended December 31, 2018 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which is currently or will be 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 (“BBXRE”) financial results include:

Second Quarter 2019 Compared to Second Quarter 2018:

• Revenues of $10.8 million vs. $5.0 million
• Net gains on sales of real estate assets of $9.7 million vs. $0.7 million
• Equity in net earnings (losses) of unconsolidated real estate joint ventures of $8.8 million vs. ($0.5 million)
• Income before income taxes of $19.1 million vs. $1.6 million

BBXRE’s results for the quarter ended June 30, 2019 as compared to the same 2018 period reflect a net increase in sale activity in BBXRE’s portfolio in 2019, including its sale of RoboVault, a self-storage facility located in Fort Lauderdale, Florida, and its sale of the remaining land parcels located at PGA Station in Palm Beach Gardens, Florida. In addition, the Altis at Lakeline joint venture completed the sale of its multifamily apartment community located in Cedar Park, Texas, and the PGA Design Center joint venture sold its remaining commercial buildings located in Palm Beach Gardens, Florida.

Renin – Selected Financial Data

Selected highlights of Renin’s financial results include:

Second Quarter 2019 Compared to Second Quarter 2018:

• Trade sales of $15.3 million vs. $16.9 million
• Gross margin of $2.5 million vs. $2.9 million
• Gross margin percentage of 15.97% vs. 17.12%
• Income before income taxes of $15,000 vs. $42,000
• Adjusted EBITDA of $0.5 million vs $0.7 million ⁽¹⁾

1. See the supplemental tables included in this release for a reconciliation of Renin’s net income to Adjusted EBITDA.

Renin’s operating results for the quarter ended June 30, 2019 as compared to the same 2018 period reflect a decrease in trade sales and gross margin primarily due to lower sales volume from Renin’s retail channel customers resulting from a barn door promotion in 2018 that was not repeated during 2019, partially offset by a decrease in selling, general, and administrative expenses due to a reduction in headcount.

IT’SUGAR- Selected Financial Data

Selected highlights of IT’SUGAR’s financial results include:

Second Quarter 2019 Compared to Second Quarter 2018:

• Trade sales of $21.5 million vs. $19.6 million
• Gross margin of $9.1 million vs. $8.4 million
• Gross margin percentage of 42.57% vs. 42.80%
• Income (loss) before income taxes of $143,000 vs. ($104,000)
• Adjusted EBITDA of $1.3 million vs $1.0 million ⁽¹⁾

1. See the supplemental tables included in this release for a reconciliation of IT’SUGAR’s net income to Adjusted EBITDA.

IT’SUGAR’s operating results for the quarter ended June 30, 2019 as compared to the same 2018 period reflect a net increase in trade sales and gross margin primarily due to the opening of new locations during the second half of 2018 and the first six months of 2019, including the FAO Schweetz location in New York City and the Grand Bazaar location in Las Vegas, partially offset by a net increase in selling, general, and administrative expenses primarily due to the hiring of certain executives during the second half of 2018 and costs associated with the new locations described above.

During the fourth quarter of 2019, IT’SUGAR anticipates opening a 21,000 square foot, three-story flagship location at American Dream Meadowlands, a three million square foot shopping and entertainment complex in New Jersey.

Other Investments

The Company also has other investments in various operating businesses, including restaurant locations in Florida and companies in the confectionery industry. The businesses generated aggregate losses before income taxes of $4.1 million and $4.9 million during the three months ended June 30, 2019 and 2018, respectively. Included in the $4.1 million of aggregate losses for the three months ended June 30, 2019 was $2.1 million of property and equipment impairment losses associated with three MOD Pizza locations that are performing below expectations. Although the Company expects to continue to incur losses from these businesses during 2019, the operating results for these businesses for the quarter ended June 30, 2019 as compared to the 2018 period reflect the Company’s earlier efforts during 2018 to reduce the size of certain of its businesses in the confectionery industry, including the closure of manufacturing facilities and a reduction in personnel and infrastructure.

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About BBX Capital Corporation: BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB) is a Florida-based diversified holding company whose principal investments include Bluegreen Vacations Corporation (NYSE: BXG), BBX Capital Real Estate, Renin Holdings, and IT’SUGAR. 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 217,000 owners, 69 Club and Club Associate Resorts and access to more than 11,300 other hotels and resorts through partnerships and exchange networks as of June 30, 2019. 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 approximately 90% owned by BBX Capital Corporation (NYSE: BBX) (OTCQX: BBXTB), a diversified holding company. For further information, visit www.BluegreenVacations.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 resort development and vacation ownership industries in which Bluegreen operates, the development, operation, management and investment in residential and commercial real estate, the home improvement industry in which Renin operates, and the sugar and confectionery industry in which IT’SUGAR operates, as well as the pizza franchise and fast-casual restaurant industry in which the Company is a franchisee of MOD Pizza restaurants. 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 risk that BBX Capital’s efforts to streamline its businesses and reduce losses may not be successful or achieve the anticipated or desired benefits; the performance of entities of which BBX Capital has acquired or in which it has made investments may not be profitable or perform as anticipated; the risk that BBX Capital is dependent upon dividends from its subsidiaries, principally Bluegreen, to fund its operations and that its subsidiaries may not be in a position to pay dividends at current levels, if at all, 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 including risks relating to its ability to increase VOI sales and profitability and risks inherent in the vacation ownership industry, risks relating to its operations, its relationships with its strategic partners and its ability to successfully grow new marketing partnerships and alliances, risks that Bluegreen’s marketing alliances will not contribute to growth or be profitable, risks that the expansion of the Bass Pro/Cabela’s marketing channels will not be successful or occur as anticipated; 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 Real Estate, Renin, IT’SUGAR, and its other investments in operating businesses, 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, foreign currency transaction risk, goodwill and other intangible impairment risks, risks relating to restructurings and restated charges, and the risk that assets may be disposed of at a loss; 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 Annual Report on Form 10-K for the year ended December 31, 2018 and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which will be available on the SEC’s website, https://www.sec.gov, and on BBX Capital’s website, www.BBXCapital.com, upon filing with the SEC. The Company cautions that the foregoing factors are not exclusive, and that the reader should not place undue reliance on any forward-looking statement, which speaks only as of the date made.

The following supplemental table represents BBX Capital’s Consolidating Statement of Operations (unaudited) for the three months ended June 30, 2019 (in thousands):

The following supplemental table represents BBX Capital’s Consolidating Statement of Operations (unaudited) for the three months ended June 30, 2018 (in thousands):

The following supplemental table represents BBX Capital’s Consolidating Statement of Operations (unaudited) for the six months ended June 30, 2019 (in thousands):

The following supplemental table represents BBX Capital’s Consolidating Statement of Operations (unaudited) for the six months ended June 30, 2018 (in thousands):

Contacts

BBX Capital Corporation:

Investor Relations:

Leo Hinkley, Managing Director, Investor Relations Officer

954-940-5300,

Email: [email protected]m

Media Relations:

Kip Hunter Marketing, 954-765-1329,

Nicole Lewis / Shannon O’Malley

Email: [email protected], [email protected]

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