Bluegreen stock and health of company

[swirg53 Senior Member Find all posts View Profile Close swirg53]

I don't know about any validity or non-validity to the rumor, but I will say that sometimes "bankruptcy" does not have all the negativity in it as it sounds. Sometimes, it is mere reorganization for the much better. Maybe I am looking at it from a bright side and maybe I am naive but I'd rather look at things from the positive side rather than worry!

Susan

[jmc Member Find all posts View Profile Close jmc]

stock Price

To be exact ....80 cents a share. 3-6-09
Current Pricing
Recent Price - 03/05/09 1.05
52 Week High 12.54
52 Week Low 1.05
YTD Price Percent Change -66.45%
Beta (5-Year) 1.38
Market Cap (Total, All Common Classes) (mil) 35
As of 03/05/09

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

The stock dropped about 30% or so at the open. It must have been a large trade with not very many bids. BXG is a very thinly traded stock, so it doesn't take much to move it by a lot.

I don't know what is up. But, we should know soon. It is right around this time of year that Bluegreen releases its year end results and annual report.

There are two things that are curious. First, if there were bad earnings and a huge miss, usually, the company comes out with an earnings warning. They haven't done this yet. Second, if inside info got out to the general public that caused a sell off, then the company would have to release news to meet Reg FD (fair disclosure).

The picture will be much clearer shortly.

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

There are only 3 things that matter in their earnings release.

1) cash or cash equivalents.
2) revenue for the quarter.
3) available credit facilities.

[jmc Member Find all posts View Profile Close jmc]

Bluegreen Corp

There is some interesting reading that was posted on the Bluegreen Corporation website under "Investors:SEC filings form 8-K report". It outlines what their business plan is going forward for 2008-09 strategic plan is. There are a few other 2009 postings but I am not sure what they are about. One is about Bay Harbour management but that may be a known affiliation???

[Carolinian Super Moderator Find all posts View Profile Close Carolinian]

Diamond's massive credit lines have also been reported to have been canceled due to the credit crunch on wall street- so until the finance situation starts to clear up in general- they won't be as active. Diamond also just suspended their reacquisition programs across the board until their credit lines are reinstated. Diamond's backers have access to a large cash pool- so the purchase of BlueGreen is still a possiblity due to the drop in stock price- but I personally just don't see Cloobeck taking that risk at this point.. Who knows, perhaps Cloobeck and Jim Murren will go to dinner again and change their focus back on casinos!

BlueGreen owners that were worried about Diamond can now relax a bit.......

Of course, he may also be thinking that he can pick up the pieces he wants even cheaper in a bankruptcy fire sale.

[swirg53 Senior Member Find all posts View Profile Close swirg53]

There is some interesting reading that was posted on the Bluegreen Corporation website under "Investors:SEC filings form 8-K report". It outlines what their business plan is going forward for 2008-09 strategic plan is. There are a few other 2009 postings but I am not sure what they are about. One is about Bay Harbour management but that may be a known affiliation???

Would you please send a link to this interesting reading? Thank you!

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

There is some interesting reading that was posted on the Bluegreen Corporation website under "Investors:SEC filings form 8-K report". It outlines what their business plan is going forward for 2008-09 strategic plan is. There are a few other 2009 postings but I am not sure what they are about. One is about Bay Harbour management but that may be a known affiliation???

Yeah, I read that powerpoint presentation. What I recall of it is that it was primarily the inventor pitch for their loan portfolio. Sounds to me like they are pitching investors to buy stock to invest in the loans secured by timeshares. Pretty interesting data in it.

[jmc Member Find all posts View Profile Close jmc]

Bluegreen Corp link

Sorry for not including this from the get-go. I hope this works

Bluegreen Corporation - Investor Relations - Bluegreen Corporation - Investor Relations

Pick SEC filings on the left and then the Form 8K.

This next link is direct but it looks like a long link....

Bluegreen Corporation - Investor Relations - Bluegreen Corporation - SEC Filings

Happy reading...

That was easier than what I thought. New to this, sorry.

[jmc Member Find all posts View Profile Close jmc]

Bluegreen 4th quarter report

Here is the links to Bluegreen Corp. website for the 4th quarter.
Bluegreen Corporation - Investor Relations - Bluegreen Corporation - News Release

SEC filing: Bluegreen Corporation - Investor Relations - Bluegreen Corporation - SEC Filings

Happy reading...

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

I read the Earnings release and I was very positively surprised at the results.

Here are some takeaways that I had.

1) The overall quarterly loss masks what is actually happening in the business. Much of that loss was due to non-cash accounting losses due to writing off of goodwill impairment charges. These are true realized losses. But, they don't impact cash. That was an $8.5M non-cash related write off. And, there was another $4.6M in inventory write downs for the residential business.

2) Bluegreen reduced staff by 50% and took a $15.6M restructuring charge. That should be a one time event. The reduced staff will result in a much lower breakeven point for sales volume.

3) The operating profit for the businesses was decent. $15M profit for the Vacation Club business. A $7.9M loss for Bluegreen communities which was to be expected given the horrible real estate market. And, a whopping $19.5M in interest income from their loan portfolio. If you take out the restructuring and good will expense, then the operating profit from the businesses was still over $7M.

4) Contract sales in the timeshare business was only down 17% year over year. That surprised me. I would have expected about 30% decrease and 50% over the entire year, given that Bluegreen has eliminated 50% of their work force. The total contract sales were $94M for 4Q2009 for Bluegreen Vacation Club. That is an eye popping number even though its 17% lower than 4Q07. They can generate sales. But, they will eventually run out of credit. So, what we don't know is at what level of sales does Bluegreen believe it has sufficient credit facilities? If credit comes back, this stock will pop since they can sell as much as they have financing for.

5) Cash was down significantly over the course of the last year. Unrestricted cash went from $125.5M on Dec 31, 2007 to $60.6M on Dec 31, 2008. This is the key number to watch because if it goes down too low, then that is when the company is at risk of bankrupcy.

6) The company reiterated it's forecast that it does NOT require additional loan facilities through 2009. This is probably the most positive sign because hopefully, the worst is behind us in the financial markets.

7) It is also interesting to note that Bluegreen has on its balance sheet $340M in notes receivable. Presumably, these are timeshare loans that it would probably like to sell and turn into cash. That is way up from $160M from the prior period. Given their perceived performance of that loan portfolio, it probably explains why they are out there pitching to potential inventors to invest in Bluegreen to get access to that revenue stream. As you can see, it generated more profit last quarter than the timeshare business did. What matters is the expect default rate of those loans. It will be interesting to watch because this could explode on Bluegreen. Or, it could be a highly performing asset that keeps them afloat.

8) Bluegreen appears to be offer consulting services to the industry. They are going to peddle their knowledge of resort management. Not sure how they will do that with a work force 50% smaller than it once was. But, to me, I wouldn't be surprised if they started managing resorts for a fee like VRI does. Very interesting development.

There are still tons of risk in this stock. It seems that the current market cap of $41M may be way undervalued if it can survive the current financial and economic crisis and dump the residential real estate business.

When you net out the one time items, BXG has a net income of $6M for the quarter. Annualized, that is $24M. That would be a P/E ratio of 1.7. If anything good happens in the credit markets for timeshares or if the $340M in loans on the balance sheet continue to perform well. Watch out. Then again, their credit facilities could run out and the company can go backrupt. At this point, more people believe in the later than the former which is why the stock is at $1.26.

[mrspigdoc Member Find all posts View Profile Close mrspigdoc]

please remind me again Boca

Jim,
Please remind me again of what happens if Bluegreen goes bankrupt. Do we still go on vacation, still call for reservation, or does the whole thing blow up?
Teresa

[BocaBum99 Super Moderator Find all posts View Profile Close BocaBum99]

Jim,
Please remind me again of what happens if Bluegreen goes bankrupt. Do we still go on vacation, still call for reservation, or does the whole thing blow up?
Teresa

The Bluegreen Vacation Club is a separate corporate entity. It has its own board of directors that are elected at each annual meeting. The Bluegreen Vacation Club is owned by us. We fund it with the payment of our maintenance fees and annual dues. Maintenance fees and taxes go to the resorts based on the budgets they require to operate the resorts. Each budget is made up locally. Annual dues goes to fund the call center and reservation and owner services team. With over 160,000 Bluegreen owners, the $129 represents an operating budget of over $20M. Lots of money to fund the call centers. So, we are the owners and we pay the bills.

Bluegreen Corporation (BXG) is the resort developer and management company for the Bluegreen Vacation Club. We hire Bluegreen to build us new resorts, to manage the resorts and to operate the call centers.

Bluegreen makes money by selling timeshares to new or existing owners. They also earn a management fee for managing the resorts and running the call centers. Separately, they make money servicing and selling loans and running a residential home building business which is hurting pretty badly right now.

So, let's say that Bluegreen goes bankrupt. The Bluegreen Vacation Club would still be managed by Bluegreen until they liquidate the company. If that happened, then someone else would manage the resorts and the call centers. Someone else would build the resorts. And, they can't change the name of the Club. They can just run it like it is and then evolve it over time.

Does that make sense?

[jmc Member Find all posts View Profile Close jmc]

Extremely helpful information

Thanks Bocabum for this very helpful and simple explanation of how the business side works. As an extremely satisfied owner of Bluegreen timeshare, I am glad this support group provides us the education we should already know or strive to understand better..... as I am currently working on what I should have known before. Better late than never.

[VA_Traveller Senior Member Find all posts View Profile Close VA_Traveller]

Stocks almost 2 bucks now. Company almost doubled in market cap