Bluegreen Vacations Holding Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

Segment Reporting

3 Months Ended

Mar. 31, 2018

16. Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is regularly reviewed by the chief operating decision maker (“CODM”) in assessing performance and deciding how to allocate resources. Reportable segments consist of one or more operating segments with similar economic characteristics, products and services, production processes, type of customer, distribution system or regulatory environment.

The information provided for segment reporting is obtained from internal reports utilized by management of the Company. The presentation and allocation of assets and results of operations may not reflect the actual economic costs of the segments as standalone businesses. If a different basis of allocation were utilized, the relative contributions of the segments might differ, but the relative trends in the segments’ operating results would, in management’s view, likely not be impacted.

In the table for the three months ended March 31, 2018 and 2017, amounts set forth in the column entitled “Corporate Expenses & Other” include interest expense associated with Woodbridge’s trust preferred securities (“TruPs”), corporate overhead, the operations of the Company’s MOD Super-Fast Pizza franchise restaurants, and a controlling financial interest in a restaurant acquired in connection with a loan receivable default. The Company opened two MOD Super-Fast Pizza franchise restaurants during the fourth quarter of 2017 and one location during the three months ended March 31, 2018. As of March 31, 2018, management determined that the restaurant operations did not warrant separate presentation as a reportable segment.

The Company evaluates segment performance based on segment income before income taxes.

Set forth below is summary information regarding the Company’s reportable segments:

Bluegreen

Bluegreen markets, sells and manages real estate-based VOIs in resorts generally located in popular, high-volume, “drive-to” vacation destinations, which were developed or acquired by Bluegreen or are owned by others in which case Bluegreen earns fees for providing these services. Bluegreen earns fees by providing VOI title services, club and homeowners’ association management services, mortgage servicing, reservation services, services related to the Traveler-Plus program, food and beverage and other retail operations, and construction design and development services. In addition, Bluegreen provides financing to qualified individual purchasers of VOIs, which provides significant interest income.

BBX Capital Real Estate

BBX Capital Real Estate activities include the acquisition, ownership and management of real estate, real estate development projects, and investments in real estate joint ventures. BBX Capital Real Estate also manages the legacy assets acquired in connection with the sale of BankAtlantic to BB&T Corporation in July 2012. The legacy assets include portfolios of loans receivable, real estate properties and previously charged-off BankAtlantic loans.

Renin

Renin manufactures interior closet doors, wall décor, hardware and fabricated glass products and operates through its headquarters in Canada and two manufacturing, assembly and distribution facilities in Canada and the United States. During the three months ended March 31, 2018 and 2017, total revenues for the Renin reportable segment include $8.5 million and $8.2 million, respectively, of trade sales to two major customers and their affiliates. Renin’s revenues generated outside the United States totaled $4.6 million and $6.3 million, respectively, for the three months ended March 31, 2018 and 2017. Renin’s properties and equipment located outside the United States totaled $2.2 million and $2.0 million, respectively, as of March 31, 2018 and 2017.

BBX Sweet Holdings

BBX Sweet Holdings consists of IT’SUGAR, Hoffman’s Chocolates, and manufacturing facilities in the chocolate and confection industries serving wholesalers such as boutique retailers, big box chains, department stores, national resort properties, corporate customers, and private label brands. IT’SUGAR is a specialty candy retailer currently with 96 locations in 25 states and Washington, D.C. and Hoffman’s Chocolates is a manufacturer of gourmet chocolates with retail locations in South Florida. BBX Sweet Holdings acquired IT’SUGAR in June 2017, and its results are not included in financial information for the three months ended March 31, 2017.

The table below sets forth the Company’s segment information as of and for the three months ended March 31, 2018 (in thousands):



		Reportable Segments
			BBX Capital			Corporate
			Real		BBX Sweet	Expenses &		Segment
		Bluegreen	Estate	Renin	Holdings	Other	Eliminations	Total
Revenues:
Sales of VOIs	$	56,141	-	-	-	-	-	56,141
Fee-based sales commissions		45,854	-	-	-	-	-	45,854
Other fee-based services		28,024	-	-	-	-	-	28,024
Cost reimbursements		16,200	-	-	-	-	-	16,200
Trade sales		-		14,985	21,865	1,530	(2)	38,378
Sales of real estate inventory		-	6,409	-	-	-	-	6,409
Interest income		21,122	1,534	-	16	445	(1,200)	21,917
Net gains on sales of assets		-	4,069	1	-	-	-	4,070
Other revenue		181	739	-	19	279	(169)	1,049
Total revenues		167,522	12,751	14,986	21,900	2,254	(1,371)	218,042

Costs and Expenses:
Cost of VOIs sold		1,812	-	-	-	-	-	1,812
Cost of other fee-based services		17,411	-	-	-	-	-	17,411
Cost reimbursements		16,200	-	-	-	-	-	16,200
Cost of trade sales		-	-	12,150	14,681	607	(2)	27,436
Cost of real estate inventory sold		-	4,247	-	-	-	-	4,247
Interest expense		7,767	-	158	89	2,377	(1,200)	9,191
Recoveries from loan losses, net		-	(4,813)	-	-	-	-	(4,813)
Asset impairments, net		-	45	-	187	-	-	232
Selling, general and
administrative expenses		93,549	2,485	2,760	11,636	15,095	(169)	125,356
Total costs and expenses		136,739	1,964	15,068	26,593	18,079	(1,371)	197,072

Equity in net earnings of
unconsolidated real
estate joint ventures		-	1,280	-	-	-	-	1,280
Foreign exchange gain		-	-	52	-	-	-	52
Income (loss) before income taxes	$	30,783	12,067	(30)	(4,693)	(15,825)	-	22,302


Total assets	$	1,217,976	137,970	35,330	89,096	183,568	(81,671)	1,582,269

Expenditures for property
and equipment	$	5,462	23	107	1,212	1,271	-	8,075
Depreciation and amortization	$	2,927	91	289	1,394	227	-	4,928
Debt accretion and amortization	$	1,018	-	-	52	19	-	1,089
Cash and cash equivalents	$	167,845	6,421	-	7,332	168,347	-	349,945
Equity method investments	$	-	48,841	-	-	-	-	48,841
Goodwill	$	-	-	-	39,482	-	-	39,482
Receivable-backed notes payable	$	413,334	-	-	-	-	-	413,334
Notes payable and other
borrowings	$	83,764	20,858	13,689	7,013	80,000	(80,000)	125,324
Junior subordinated debentures	$	70,677	-	-	-	65,048	-	135,725

The table below sets forth the Company’s segment information as of and for the three months ended March 31, 2017 (in thousands):



		Reportable Segments
			BBX Capital			Corporate
			Real		BBX Sweet	Expenses &		Segment
		Bluegreen	Estate	Renin	Holdings	Other	Eliminations	Total
Revenues:
Sales of VOIs	$	54,236	-	-	-	-	-	54,236
Fee-based sales commissions		45,154	-	-	-	-	-	45,154
Other fee-based services		26,121	-	-	-	-	-	26,121
Cost reimbursements		14,670	-	-	-	-	-	14,670
Trade sales		-	-	17,217	6,122	-	-	23,339
Interest income		22,386	582	-	-	187	(2,000)	21,155
Net losses on sales of assets		-	(198)	-	-	-	-	(198)
Other revenue		(245)	1,091	-	8	243	(140)	957
Total revenues		162,322	1,475	17,217	6,130	430	(2,140)	185,434

Costs and Expenses:
Cost of VOIs sold		3,159	-	-	-	-	-	3,159
Cost of other fee-based services		16,107	-	-	-	-	-	16,107
Cost reimbursements		14,670	-	-	-	-	-	14,670
Cost of trade sales		-	-	13,856	5,740	-	-	19,596
Interest expense		7,644	-	79	85	3,016	(2,000)	8,824
Recoveries from loan losses, net		-	(3,094)	-	-	-	-	(3,094)
Asset recoveries, net		-	(13)	-	-	-	-	(13)
Net gains on cancellation of
junior subordinated debentures		-	-	-	-	(6,929)	-	(6,929)
Reimbursement of litigation
costs and penalty		-	-	-	-	(9,606)	-	(9,606)
Selling, general and
administrative expenses		89,835	2,531	2,781	3,388	14,911	(140)	113,306
Total costs and expenses		131,415	(576)	16,716	9,213	1,392	(2,140)	156,020

Equity in net earnings of
unconsolidated real
estate joint ventures		-	3,236	-	-	-	-	3,236
Foreign exchange gain		-	-	191	-	-	-	191
Income (loss) before income taxes	$	30,907	5,287	692	(3,083)	(962)	-	32,841


Total assets	$	1,118,296	191,538	29,913	31,355	126,982	(82,260)	1,415,824

Expenditures for property
and equipment	$	3,028	115	587	71	98	-	3,899
Depreciation and amortization	$	2,356	147	147	461	195	-	3,306
Debt accretion and amortization	$	1,066	-	-	62	-	-	1,128
Cash and cash equivalents	$	117,920	24,708	(158)	5,372	114,550	-	262,392
Equity method investments	$	-	48,843	-	-	-	-	48,843
Goodwill	$	-	-	-	6,731	-	-	6,731
Receivable-backed notes payable	$	393,030	-	-	-	-	-	393,030
Notes payable and other
borrowings	$	94,471	20,742	7,751	4,980	80,000	(80,000)	127,944
Junior subordinated debentures	$	69,422	-	-	-	64,976	-	134,398