BXG - Earnings call transcript Q1 2019 | Bluegreen Vacations Corp

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Evelyn Infurna

Good afternoon, everyone. Thank you for joining us today to review Bluegreen Vacation’s first quarter 2019 financial and operating results. Today’s business update will be presented by Bluegreen Vacation’s Chief Executive Officer, Shawn Pearson and Chief Financial Officer, Tony Puleo. I would like to remind listeners that this pre-recorded business update might contain forward-looking statements based largely on current expectation of Bluegreen Vacations 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. assurance expectations no be prove give correct. can that will such to We or materially are, are could expressed, results, based control. uncertainties achievements Actual performance, to subject differ cases, number risks by change beyond forward-looking that Company’s are a factors or these from many statements to and which subject on of and in implied contemplated, those the implement without relationships its uncertainties include, increase limitation, anticipated successfully with ability strategic and with and company’s risks earnings Risks the generate and its partners to growth, and currently plans, associated long-term value. shareholder

and March are on Form ended risks December detailed its view X, on Vacation’s Bluegreen SEC's Additional on three year filed XXXX, website, Form for filed XXXX, on XXXX, www.bluegreenvacations.com. X, May and uncertainties months on on March Vacation’s on the for Annual Report of about Report XX, the XXXX, in XX-Q which available for Bluegreen both ended XX, website, www.sec.gov, XX-K and described are Quarterly or the

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

Shawn Pearson

you XXXX review first our joining quarter as today we Thank results. for us

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are their the to and amounts. we that stores first want first a outcome sell significant alleged the achieved quarter we not XXXX we under to a have that We Pro marketing Pro and XX% hopeful of to compared sold of quarter agree also satisfactory not both agreement our claims the the can with believe increase we vacation packages in packages for claims, in vacation marketing channel our reiterate Bass we realize through are in monetary of number Bass do while companies, XXXX. that do involve the I continuing of

on We are XXXX, in XX, Pro location. our Cabela’s also pleased to opened Rogers, announce Arkansas, we April a Bass that formerly kiosk newest

Big Pro is BBX shareholder Cedar addition, know our the of point affiliate in venture at Wilderness joint new merger the Capital is short-form the Corporation. construction cabins Bass currently the Resort. with of of In XX%-owned an involving of status possible interest Club at engaged I another

determination. developments merger. once will keep has its is whether BBX no apprised case. that has under advised is BBX BBX reevaluating to that the pursue BBX made the announced, previously us this obligation As the to is it pursue understand still us merger. We of

talk our operations. Now, let’s about

important impact platform support the a long-term, objective improvement. As focus are to achieve profit on what initiatives team, will to enable most a a have To believe of of which continuous this and growth. strategic we continued necessary that management our end, building number we areas we underway

well as reinvigorate take time. sales to sales will VOI increased vacation result the as channels increased our prospective sales tours partners. result we of is outlined tours must sales. in Increased in marketing of principal of increased call, our new One should reacceleration on both and then existing last as sales goals through through But, packages our first

benefit the for results quarter our today do we not VOI foundation that are While reflect confident we long-term the are future. our of the laying translate into will the in investments, sales

per X% again, prospects, we or price a in increase in compared quarter. credit But, have Our tours sales quality in designed in both yield quarter once a transaction, VPG, the in guest an volume vacation seen XXXX sales improvement average the packages drove second initiative, the in first impact XXXX. management X% guest, half as to and sales of X% enhance to in decline increase of lower of of efficiencies sales of first our a which the with our per resulted

seeing their existing sales the quarter prior an channels, interested relationship. the is Choice Bluegreen are fully With Choice we trends believe our our Importantly, indication are promising to period, as established first owners which our X% up expanding to by engaged and versus to we hotels compared XXXX. are our through X% increased experience. respect marketing comparable roughly year of Sales owners in relationship that in

to the continue we the the call Choice the convert are We training packages. from sales helping see to on being believe successfully improved of through Choice implemented Privileges webpage flow that center program improvements vacation from and leads included to in

the X Bass of months We the Pro. channel package versus issues with sales period. ongoing in Bass occurring the are our XX in vacation these vacation the quarter are year despite achieved quarter we believe leading by While encouraged VOI for strong are and packages indicators next over XXXX, prior from sales to down compared to comparable the sales XX% first are increase Pro the

showing believe shared with Bluegreen’s creative to existing of but our as generation. look and The are enter Development and past, our into targets time with organizations Business approach consistent to sports team associations we As will we are iconic middle-America promise professional efforts we retailers, our lead These relationships in channels developing channels augment of demographic. have take various goal that to marketing the that national demographic. preferred, is diversify

& specifically and our open of at in terms to these very recent Éilan quarter, the with of Antonio, resorts office generated the are sales exceeding is VOI over million date. our In Louisiana, Spa San the Hotel introduction Orleans, Marquee more resort sales Texas The New Éilan in successful and we in pleased the in the $X expectations. offerings, sales first

we of resort. full-service attention invested have upscale from a guest getting great a to and We as hotel operations right to deal timeshare experience an the converted time

interactive fact, off for theater owners hosting XXXX. from having great experience December history new under and guest early campus of the fully response extremely of of the the on experience. The its a the American director in in elements in The completed first Fee-Based The our the is ARDA will Marquee the areas, being guests been our is in by recently by in recognized positive. common expected guests our most In and iconic excellence of our benefit is XXXX a of Even rich sales prospective before partners opened city. at rooms June and believe renovation guest the operational is Éilan’s district Marquee be experience this to provide and the digital Marquee to start. office resort, one experiences. banquet to Service expected and one has check-in unique we was to the of owners From

the called continue our fourth but exit believe their and the activity to the quarter, in are cease and impact desist so timeshare we firms promising by we to see initiatives. from our As some attorneys results, beginning results

discredit XXX of advertising, and exit the in quarter’s insufficient to guarantee a as findings did claims certain substantial fees. to for is the upfront in predatory Resource misrepresentations bankruptcy our through reserves to provision. and While American year’s on first timeshare the XX.X% compared their a quarter over good believe in had bank paid rose practices. of cash ARMG basis the progress. of largest XX.X% losses to who potential as clients. owners The and loan effect cover of We April, XXX% improvement sued rate for that ARMG, other XX.X% to prior their our trade year industry These fourth timeshare efforts On court accounts false efforts prior these of favorable referred not in made faith being assertions firms made, thousands that conspiracy deceptive our excess reflect by respect Group, these to quarter supported provision filed of timeshare are reflected for of the In originations one Management lower with acting minimal XXXX exit courts civil in noted firms, sequential estimates. others timeshare Bluegreen another among company and a point previous period, exit after the in firms the making the prepayments basis, that the the the to and

this who contract by third-party claim that be to no do. the ability see victory, owners a of these and work as exit there talking is Since call, ended would have to last served default we firms services that third-party we success the have getting signed who better the of out of defaulting our still these up While of practice to upon denying owner us. our great directly general to owners their these with firms, providing recognize thus deal we a firms highlighting are

participating Bluegreen owners their that American the in adopted with Resort circumstances Association’s for have end also assist We to under Coalition our appropriate Responsible strategies are certain need Exit. and to Development relationship

vacation owners to launching start foot to their on new programs the get experiences as continue and our outreach We our Bluegreen. with right enhance off are to they owners

Resort a segment, to year in realized quarter continued first growth We growth growth the the in EBITDA in a XX% Operations are our and Management revenue in with prior very the and period. pleased compared Club XX% which

contracts. of the business was and increases been have our of $XX.X also the for capital-light recurring, EBITDA, segment million which number realize have provides to management to We grown existing resorts XX This able on management quarter. fee under certain of our

the marketing of improved on the encouraged results pipeline activation But, of have we the our quarter, by on vacation our term. first of channels, a well in sales number fixed for of packages. in reflect vision through our as we our vacation As packages we improvement as marketing the are the long

will We our now of incremental opportunities, the detailed return future. our growth continue and owners, to in our marketing prospective to trajectory Tony growth review is enhancements results. goal our first to a positive Tony? provide a channels focus on and to quarter current

Tony Puleo

of in prior roughly our in results and XX.X% XX,XXX Thanks, in system-wide to approximately nearly transaction XXXX, $X,XXX. declined to of quarter Starting and at Sales new with period, by communications, sales include X% tours X% total guest versus a of pipeline. package which first was per My XX.X%, sold. VOIs operating mix to were Average will with year was X% VOI guest prior at our the to sales compared existing remarks price consistent compared year lower we quarter XX,XXX position. operations, period, in financial review tours overall the comparable led Shawn. XX% vacation reflecting guest X% to the Total tours versus our quarter first prior work to Conversion quarter of refill ago. fell as the XXXX. today improvement as owners a came nearly of year the our first the VPG compared main driver comparable the rose sales ratios

of partially in million, on of a XXXX the calls, primarily increases $X.XX year in $X.XX million the net per to due or down The share the of the Adjusted change adjusted share we $XX.X income prior was losses, the the quarter million period. quarter fully primarily corporate diluted operating anticipated fully decrease our net cost per that Moving $XX in from margin in VOIs net cost reflects our compression quarter by on earnings, of $XX.X costs sold diluted first first or to These were higher provision first EBITDA of the and in to our loan carrying XX% income compared expenses. for XXXX. conference inventory. prior for overhead our EBITDA of was offset

in on period quarter losses, the discussed, trades, while comparison to prior due the to for provision in the the of being impact the prior to provision Shawn years’ an first equity previous loan unfavorable As low estimates. this due primarily excess variance atypically originations prior was year of prepayments, reflected year especially

and be range XXXX, our in the in losses XX% We XX% first loan of to provision XX.X% quarter. for expect continue to to the it was for

hopefully to benefits provision We anticipating decline loan loss expect some variance the the low XXXX. with quarter are these year a loan the for and an sold. dealing Cost basis prior provision related of strategies stabilize not as to reflecting in mix in percentage due in to as to have on losses XXX with impact first take exit but, quarter Shawn rose timeshare of VOIs time the the firms over effect, atypically material our we VOIs points, discussed, the sold of by to begin

cost came in previously our X% acquired than However, better favorable the inventory as previously of sold at we was more than secondary which VOIs market announced for quarter, at estimated. expectations rates

sold which remainder Antonio, of increased XXXX. to cost of in million XX% expenses reflecting million inventory to of higher would slightly reflecting decreased We reduction XX% marketing quarter in but expect long-term the the & of incentive first continue to in declined $X.X system-wide in Hotel of to XX%, of to of We Corporate million Texas, range from XXXX from quarter acquired $X.X XX% Éilan compared sales costs expenses. XXXX. overhead XX.X quarter carrying and X% XXXX. for compensation VOIs legal, the and April of commission to these to to cost the the XXXX, expect acquisition in rose our first first due San healthcare throughout slightly the the Selling quarter Net to million in $XX.X XXXX, primarily higher we rates. a from Spa

Turning terms position, $X.X $XXX.X quarter million first $XXX.X of to collateral availability available Bluegreen’s the remains balance solid credit as excluding of under the payable, was $XXX Marquee the the to as We our notes our supports cash, million the and growth ratio, sheet million believe, we initiatives very our debt-to-EBITDA with pursue receivable-backed opportunities us unrestricted with billion in additional subject external and and sheet assets and a net facilities, in such amply Company’s Manhattan of provides ended The the X.XX. to The low facilities. flexibility balance financial Éilan, Club. the growth

believe stock, of shareholders call, dividend increase dividend are January second share our growth the meeting, XX% annualized of payable quarter now This dividend XXXX. quarter attractive the previously infrastructure per May the for over At Xth, in XXXX fourth As space. XXXX. provides timeshare communicated a representing declared declared $X.XX XXth, We that April within record XXth, To yield on their share on on XXth dividend per cash common of on is place. initiatives of board of our a improvements Bluegreen conclude, board directors to $X.XX significant dividend XXXX. for the longer-term an and a April

predatory We are Further, to trends of channels stability deal a are provides of seeing and in certain with Vacation great encouraging sheet marketing our our owners our protect and efforts firms. exit from progressing flexibility. in balance Club timeshare us our

year as for have in initiatives our view yield forward focused a joining proceeds. we to our you have look today. aspects updates provide Thank of shareholders. to on the improving returning with the meantime, the our us our We revenue critical to We progress continuously dividend strategic business, industry-leading with growth. And most continued providing attractive an to on for you

Bluegreen Vacations (BXG) 6 May 192019 Q1 Earnings call transcript