BXG - Earnings call transcript Q2 2018 | Bluegreen Vacations Corp

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Danielle O'Brien

Good afternoon, everyone. Thank you for joining Bluegreen Vacations' discussion of its Second Quarter 2018 Financial and Operating Results. Today’s business update will feature Bluegreen Vacations' Chief Executive Officer, Shawn B. Pearson, and Chief Financial Officer, Tony Puleo. I would like to remind listeners that this pre-recorded business update may contain forward-looking statements based largely on current expectations of Bluegreen Vacations that involve a number of risks and uncertainties. future fact, other are projections, statements other forecasts, historical of forward-looking opinions, plans statements, or than All statements. We such can expectations that will prove give to be no assurance correct. contemplated, achievements and which statements subject are, on beyond are to risks instances, materially performance, subject these of are could the number in uncertainties results, implied by many or from Actual Company’s factors those and expressed, a to or forward-looking based differ control. that change the shareholder include, Company’s anticipated uncertainties Risks without implement and associated with to limitation, current ability and plans, long-term risks successfully growth, value. earnings generate and increase

XXXX, Additional is detailed for Annual the are to expected Vacations' the on site SEC's and site, in and quarter filed August on June Report ended December ended Bluegreen about Bluegreen XXXX Web on Report be filed XX, XXXX risks Vacations' on available and uncertainties Web or year its XX-K which on view and for XX-Q, the to www.bluegreenvacations.com. www.sec.gov, X, at Form Quarterly described XX, Form

Shawn also made. have speaks on slide not deck should Listeners on supplementary undertake, are Chief and provided not cautions to that update the Vacations the foregoing Executive factors disclaim undue we earnings and do Officer. any available reliance site. Web of supplement date as forward-looking place forward-looking Pearson, statement, our only any which which Bluegreen exclusive, is a turn We statement. over now it not any specifically Shawn? or to obligation, I will

Shawn B. Pearson

everyone. Danielle, and hello, Thank you,

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expanded Suites opportunity access see Choice’s program the in through which marketing search base and remain ours, with as core additional the loyalty channels, the given is a to well additional year. identifying customers optimization marketing forward franchise alliances to demographic opportunity align customers with engine social us emails, of and whose brand interact include We of to as that opportunities result digital guests WoodSpring core focused this customer ads efforts. through identifying Our of members and on targeted look business aligned the marketplace. Choice’s engage strategic We demographic as our identifying companies the with earlier ample and we acquisition has

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our our our package used. in marketing reality We the virtual Historically, term, approximately of only further near package this of through We packages package see of intermediate be settings believe offices. sale focused this in were as You to sales our will XX% our to in frontline digital alliances on utilization sold of refer rate and in our initiatives improving activations. activation. vacation marketing refinement

We early some are developing activations success. digital begun and to have increase approaches to see

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on by frontline and example to frontline remaining This Club agreement These plan into center, the key City. in sales in-house exclusive into our purchases. ground converting right, contract center and, New This an we at owners. expands gives of sales in resorts' by acquire goals demonstrate the to a the sales by converting a in-house space our periodic and as November. our expected X,XXX resort exclusive unit our York XXXX. by market, a an us inventory at foot square Additionally, York program, In facility in to boost secondary New stated sales another sales non-committed basis, operational The the centers New on Manhattan Both existing the by commercial fourth floor Orleans quarter serve since the acquire one is opportunity Manhattan through a going within The open to timeshare to announced in Club last resort capital-light public be year-end. we XXXX, sales foot inventory plans X,XXX management are to June, square execution agreement with agreements also

West growing Pension. Northeast, simultaneously while reflect presence expanding our footprint approach where transactions New We these These sales seen both sales. key markets through we’ve capital-light Orleans, to our also the Club experience in and as are our in at well in balanced developed La our the VOI as opportunity and

square expected supported growth. our to discussed, will expanding that centers significant Bluegreen centers most three expansion have the expected the by with is to incremental These sales of marketing, in When sales presence, XX,XXX already center our finished, expansions six center substantially sales been completed addition of open of are an XXXX. sales over prime other our to sales IPO, space. summer key by have be addition Since center sales be its our feet same-store years, In Bluegreen will of growth.

briefly industry-wide me an our issue. Let on progress and comment addressing desist cease

we, delinquencies obligation, by you owner in with industry, that As others been the which purport they have can and VOI defaults. know, encourages along targeted firms law predatory owners' eliminate

last quarter, As we we’re taking advised proactive a you stance. more

Our the progress as termination owner of than June making new industry representation entire Osa, Compliance la who notices industry. filed firms Chief and Jorge Officer, XXX de of third-party experience, with timeshare joined substantial more Multiple have contracts. us already vacation in is club timeshare Legal are efforts the exit regarding

new sales that our exploring and footprint line testing additional still it While including and we strategy, addressing leveraging our days new demographic, with frivolous aggressively dedicated sales expanding markets, In our to executing problem. proactive exciting encouraged the in target and intend and customer marketing in resort expanded our for partnerships footprint. is these and expanding platform, summary, and we’re early this strategy strategies claims continue industry-wide digital to remain in Western by our are and fighting our Northeastern or

Our and rest leadership of look the team to XXXX. Board forward

us numbers. Chief our Now, will take Tony Financial through Puleo, Tony? Officer, the

Tony Puleo

Thank you, Shawn.

margin improved results increase sales share, percentage. or increase cost X% an in quarter income for lower the overhead tax and million, areas. June per a resort begin three revenues, or and rate, quarter operating were compared We for and which certain financial lower with effective margin, income for a marketing an as share metrics $XX.X $X.XX by results second financial cost growth as and the XX, months demonstrated expenses second sales of total I a was XXXX. a management Our corporate to per will in second ended percentage, higher the key in well Net across partially operating $X.XX recognized quarter. million, improvement $XX.X offset

prior to the are costs due to compared million we frivolous. $X.X as legal increased overhead corporate result believe partially Our to higher settle quarter, defend our than law a of new year rather that suits ongoing strategy

the care health increase years several after of self-insured of related care and XXXX addition, the costs, original In XXXX. million estimates, related resulted quarter benefit last of compared a year overhead we’ve public which $X.X Since second to in the going which to $XXX,XXX expenditures in we’ve corporate and for as this of in relations, excess health in public second were incurred quarter. favorable year, quarter expenses our investor

XXXX, Lastly, digital provision higher of the the compared to other year XXXX the the quarter in for before prior from Adjusted of $XX.X million $XX.X income of $XXX,XXX. was investments, period. million and was X%, connection with we’ve information X% depreciation for a $XX.X technology second incurred of expense non-controlling for comparable decrease XXXX. million quarter, interest for second and Income down quarter tax EBITDA

adjusted price relative exclude benefit the benefit XXXX. of to recognized value we this quarter XX% quarter sold with overhead sold, XXXX. corporate a second X% of XXXX of second XX% in variances cost in accordance would mentioned, with to accounting in and X% higher we the a increase was due of XXXX the to accordance The This associated sales the per reflected I quarter primarily was in a increase of increase of no addition method in VOIs EBITDA XXXX. XXXX, adjusted cost would of quarter In VOIs cost change have GAAP. to realized sold with price of benefit in sold a and earnings of have percentage million second of with cost matrix versus VOIs a share to in price VOIs If benefit such increased XXXX, significant in $X.X resulting of increase the the

$XXX quarter an second the in million second sales to in tours. by from sale-to-tour XXXX. by the decrease Turning to increased in quarter sale-to-tour the system-wide results, a conversion our quarter reflected versus second XXXX XX% increase of guest of growth X% The conversion $XXX.X segment million in of ratio, XXXX second of partially the VOIs XXXX. of quarter increased number This ratio offset the

of as XXXX. realignment one due sales existing sales driven sales VOIs from average of XX% period, segment, guest, corporate XX% Since revenue Louisiana increases In our Carolina. focused we Management XXXX, marketing both benefited model, Operations in only business new includes owners sales time since certain costs of which in which of VPG, small and all quarter this Banner Selling operating with traditional elimination decreased increased two XX% management light Club added to almost are volume increases, our system-wide North associated revenue Orleans, primarily second costs XX% specifically and in Elk, the sales flexible the the Resort fixed June and increased and capital streams. profit on Our to same-store sales initiative. office contracts a per and XX%. a by XX, the New increase to or added XXXX in and XXXX, We’ve we

in to the our revenue a VOIs, in fee-based intend quarter XX% second system-wide revenue strategy XX% XXXX. believe clients of continue was on the capital XXXX. second behalf it. balanced XXXX total second versus XX% Our quarter sales benefits versus the We XX% as of light percentage of represented our net we to of in and quarter Sales shareholders of pursue of of

This on XX% customers our mix our past system-wide economic believe peer in over resulted in mentioned, of the for us optimal goal net XX%, an what our compared second differentiates growth year. growth, We our net new we set. quarter to owner of previously the new which sales, industry the XX% new focus from XXXX in we demonstrates XXXX. owner mix see X% as were to targeted achieve environment. to believe ability of Sales As is current

loan taken on our to as of the three of year's June of of compared an in increase Our loan a as weighted-average provision loss in the prior losses impact in is additional reserves as of provision the years. to the due for decrease compared primarily originations second XXXX, gross VOIs XX, quarter score FICO months was the sales XX% impact prior during June percentage months three well XXXX. for The XXXX to XX, ended for the ended XX% in XXXX,

now to default rates. our Turning

June up default X.XX%, rates the For ended were in slightly months XX, XXXX. XX from average annual X.XX% XXXX,

from and VOI to encouraged purporting We letters delinquent receive who to ultimately the default continue represent to their have attorneys become obligations. owners owners on

As Shawn issue. both are I’ve stand past, more and discussed taking we in the aggressive this a on

Now turning sheet. to our balance

in equivalents, million cash assets billion $XXX.X Our unrestricted sheet in strong remained in $XXX.X and million $X.X equity. and with Bluegreen balance shareholders’ cash

of LLC million and and VOI As Union. In $XXX Bluegreen Vacations, purchase receivable Quorum Bluegreen/Big facilities. with had of its Bluegreen credit its notes under XXXX, June April, of Federal million non-recourse $XXX.X facility receivable purchase XX, availability renewed Credit Cedar

to notes of purchase XXXX. an Purchase amendment amount June has June a disclosed, aggregate million previously receivable basis, Facility XX, $XX VOI eligible As Quorum purchase, the XX, The Quorum to agreed an XXXX to from purchase up in period on the revolving price. extended to

grow capital Lastly, stock, to Directors share ongoing record of footprints. putting to of July XX, closing, to shareholders, XXXX. our sales per in shareholders cash as July $X.XX place same-store in of essentially the of portfolio on going declared our payment the payable return Board part a to earnings excited through have effort of about infrastructure Since our future. centers dividend public, XX, grown August we’re In and on common a resort we’re of XXXX in

Q&A - improve deliver and our and for marketing for this owners. our to enhance resorts we again Thank shareholders A and portfolio grow returns we opportunity further formal sales us you our an for our our for and today. revenue, meaningful experiences of platform, As see bolster [No event] joining margins,

Bluegreen Vacations (BXG) 4 Aug 182018 Q2 Earnings call transcript