BBX Capital Corp. is a holding company, which engages in the real estate, real estate joint ventures, and middle market operating businesses. It operates through the following segments: Bluegreen, BBX Capital Real Estate, Renin, IT'SUGAR, and Other. The Bluegreen segment markets, sells, and manages real estate-based vacation ownership interests in resorts located in popular, high-volume, and drive-to vacation destinations. The BBX Capital Real Estate segment includes acquisition, development, construction, ownership, financing, and management of real estate and investments in real estate joint ventures. The Renin segment involves in the design, manufacture, and distribution of sliding doors, door systems and hardware, and home decor products and operates. The IT'SUGAR segment offers bulk candy, giant candy packaging, and novelty items that are purchased from third-party vendors and sold at its retail locations. The company was founded in 1978 and is headquartered in Fort Lauderdale, FL.
BBX Capital relies on dividends from Bluegreen to fund operations.
BBX Capital’s acquisitions and investments may reduce earnings, require it to obtain additional financing and expose it to additional risks.
Provisions in BBX Capital's Amended and Restated Articles of Incorporation and Bylaws, as well as BBX Capital's shareholder rights plan, may make it difficult for a third party to acquire BBX Capital and could impact the price of BBX Capital's Class A Common Stock and Class B Common Stock.
Holders of BBX Capital’s Class A Common Stock and Class B Common Stock may not receive dividends in the amounts anticipated, when anticipated, or at all.
There are risks associated with BBX Capital’s recently announced plan to take Bluegreen private pursuant to a statutory short-form merger under Florida law.
Bluegreen is subject to the business, financial and operating risks inherent to the vacation ownership industry, any of which could adversely impact its business, prospects and results.
Bluegreen’s business and operations, including its ability to market VOIs, may be adversely affected by general economic conditions and, conditions affecting the vacation ownership industry and the availability of financing.
Bluegreen may not be able to develop or acquire VOI inventory or enter into and maintain fee-based service agreements or other arrangements to source VOI inventory, which may cause its business and results to be adversely impacted.
Bluegreen’s business and properties are subject to extensive federal, state and local laws, regulations and policies. Changes in these laws, regulations and policies, as well as the cost of maintaining compliance with new or existing laws, regulations and policies and the imposition of additional taxes on operations, could adversely affect Bluegreen’s business. In addition, results of audits of its tax returns or those of its subsidiaries may have a material adverse impact on Bluegreen’s financial condition.
The vacation ownership and hospitality industries are highly competitive, and Bluegreen may not be able to compete successfully.
Bluegreen’s business and profitability may be impacted if financing is not available on favorable terms, or at all.
Bluegreen would suffer substantial losses and its liquidity position could be adversely impacted if an increasing number of customers to whom Bluegreen provides financing default on their obligations.
Bluegreen's existing indebtedness, or indebtedness that it may incur in the future, could adversely impact its financial condition and results of operations, and the terms of Bluegreen's indebtedness may limit its activities.
The ratings of third-party rating agencies could adversely impact Bluegreen’s ability to obtain, renew or extend credit facilities, or otherwise raise funds.
There are risks associated with Bluegreen’s maintenance and addition of strategic partnerships and arrangements.
Bluegreen’s future success depends on its ability to market its products and services successfully and efficiently, and Bluegreen’s marketing expenses have increased and may continue to increase in the future.
Bluegreen may not be successful in maintaining or expanding its capital-light business relationships, or its capital-light activities, including fee-based sales and marketing arrangements, and JIT and secondary market sales activities, and such activities may not be profitable, which would have an adverse impact on Bluegreen’s results of operations and financial condition.
Bluegreen is subject to certain risks associated with its management of resort properties.
Bluegreen results of operations and financial condition may be materially and adversely impacted if Bluegreen does not continue to participate in exchange networks and other strategic alliances with third parties or if Bluegreen customers are not satisfied with the networks in which Bluegreen participate or our strategic alliances.
Maintenance fees at Bluegreen’s resorts and/or Vacation Club dues may be required to be increased, which could cause its product to become less attractive and could harm business.
Bluegreen’s strategic transactions may not be successful and may divert its management’s attention and consume significant resources.
Bluegreen is dependent on the managers of its affiliated resorts to ensure that those properties meet its customers’ expectations.
The resale market for VOIs could adversely affect Bluegreen’s business.
Bluegreen’s intellectual property rights, and the intellectual property rights of its business partners, are valuable, and the failure to protect those rights could adversely affect its business.
Some of BBXRE’s operations are through unconsolidated joint ventures with others, and we may be adversely impacted by a joint venture partner’s failure to fulfill its obligations.
Investments by BBXRE in real estate developments directly or through joint ventures expose it to market and economic risks inherent in the real estate construction and development industry.
A significant portion of BBXRE’s loans and real estate assets are located in Florida, and economic conditions in the Florida real estate market could adversely affect our earnings and financial condition.
BXRE’s inability to finance its real estate developments through Community Development District Bonds or obtain performance bonds or letters of credit could adversely affect our results of operations and liquidity.
In connection with the sale of BankAtlantic to BB&T during July 2012, we acquired nonperforming loans and foreclosed real estate, and our results of operations and financial condition may be adversely affected if these assets are monetized below their current book values.
A significant portion of Renin’s business relies on home improvement and new home construction activity, both of which are cyclical and outside of management’s control.
Renin’s operating results would be negatively impacted if it experiences increased commodity costs or a limited availability of commodities.
Market demand for candy products could decline.
IT’SUGAR’s opening of new stores in high profile locations may reduce earnings, require additional financing and increase capital expenditures.
IT’SUGAR’s continued success is dependent on its ability to differentiate itself from other retailers in the confectionery industry.
BBX Capital may experience product recalls or product liability claims associated with businesses in the confectionery industry.
BBX Capital may not realize the expected results from its strategic initiatives in connection with companies acquired in the confectionery industry.
FFTRG’s operations require ongoing compliance with its area development and franchise agreements with MOD Pizza.
The Company’s technology requires updating, the cost involved in updating the technology may be significant, and the failure to keep pace with developments in technology could impair the Company's operations or competitive position.
The tax impact resulting from the Tax Cuts and Jobs Act are based on interpretations and assumptions the Company has made. Any changes in interpretations and assumptions or the issuance of additional regulatory guidance may have a material adverse impact on our tax rate in fiscal years 2018 and beyond.
Unexpected events, such as natural disasters, severe weather and terrorist activities, may disrupt the Company’s operations and increase our costs.
The Company’s insurance policies may not cover all potential losses.
Adverse outcomes in legal or other regulatory proceedings, including claims of non-compliance with applicable regulations or development-related defects could adversely affect the Company’s financial condition and operating results.
Failure to maintain the integrity of the Company’s internal or customer data could result in faulty business decisions or operational inefficiencies, damage the Company's reputation and/or subject the Company to costs, fines, or lawsuits.
The Company’s business may be adversely impacted by negative publicity, including information spread through social media.
The loss of the services of key management and personnel could adversely affect the Company’s business.
Changes to and replacement of the LIBOR benchmark interest rate could adversely affect our results of operations and liquidity.
There are inherent uncertainties involved in estimates, judgments and assumptions used in the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Any changes in estimates, judgments and assumptions used could have a material adverse effect on our financial condition and operating results.
Sales of VOIs. Sales of VOIs were $254.2 million and $242.0 million during the years ended December 31, 2018 and 2017, respectively. Sales of VOIs are impacted by the factors described below in system-wide sales of VOIs. Gross sales of VOIs were reduced by $51.3 million and $46.4 million during the years ended December 31, 2018 and 2017, respectively, for the provision for credit losses. The provision for credit losses varies based on the amount of financed, non-fee based sales during the period and changes in estimates of future notes receivable performance for existing loans. Bluegreen’s provision for credit losses as a percentage of gross sales of VOIs was 17% and 16% during the years ended December 31, 2018 and 2017, respectively. The percentage of VOI sales which were realized in cash within 30 days from sale decreased to 42% during the year ended December 31, 2018 from 43% during the year ended December 31, 2017. The increase in the provision for credit losses is primarily due to the lower cash sales and the impact of additional reserves on prior years’ originations offset by the impact of an increase in the weighted-average FICO scores of borrowers with respect to 2018 originations compared to prior years. In recent years Bluegreen has experienced an increase in expected default rates. Bluegreen believes that a significant portion of the default increase in recent years is due in part to the receipt of letters from attorneys who purport to represent certain VOI owners and who have encouraged such owners to become delinquent and ultimately default on their obligations. See “Item 3. Legal Proceedings” for additional information regarding such letters and actions taken by Bluegreen in connection therewith. While Bluegreen believes its notes receivable are adequately reserved at this time, actual defaults may differ from the estimates and the reserve may not be adequate. In addition to the factors described below impacting system-wide sales of VOIs, sales of VOIs are impacted by the proportion of system-wide sales of VOIs sold on behalf of third parties on a commission basis, which are not included in sales of VOIs.