BBX Capital, Inc. Reports Financial Results For the Second Quarter of 2023
- None.
- None.
Selected highlights of BBX Capital’s consolidated financial results include:
Second Quarter 2023 Compared to Second Quarter 2022
-
Total consolidated revenues of
vs.$106.8 million $83.7 million -
Loss before income taxes of
vs. income before taxes of$(8.7) million $16.6 million -
Net loss attributable to shareholders of
vs. net income attributable to shareholders of$(8.0) million $10.5 million -
Diluted loss per share of
vs. diluted earnings per share of$(0.56) $0.68
Balance Sheet as of June 30, 2023
-
Cash and cash equivalents of
$81.5 million -
Securities available for sale of
$61.4 million -
Outstanding note receivable from Bluegreen Vacations Holding Corporation (NYSE: BVH) of
$35.0 million -
Total consolidated assets of
$673.7 million -
Total shareholders' equity of
$336.3 million
-
Fully diluted book value per share of
(1)$22.00
(1) |
Fully diluted book value per share is shareholders’ equity divided by the number of BBX Capital’s Class A and Class B common shares and unvested restricted stock awards outstanding on June 30, 2023. |
“As we have previously disclosed, our portfolio companies are facing challenges associated with inflationary pressures, rising interest rates, and global economic uncertainty, and our operating results for the second quarter reflect these challenges. IT’SUGAR and Renin are experiencing significant declines in customer demand, and BBXRE expects a substantial decrease in sales transactions and new development starts in 2023 as compared to the past several years. While our current operating results reflect a general slowdown in activity, we can report that, in spite of these headwinds, our portfolio companies remain focused on opportunistically generating growth and adapting their strategies as may be appropriate in the current environment. In May 2023, the Altman Companies commenced the development of Altis Twin Lakes, a planned 346-unit multifamily apartment community in
Additional Information
For more complete and detailed information regarding BBX Capital and its financial results, business, operations, investments, and risks, please see BBX Capital’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, which will be available on the SEC's website, https://www.sec.gov, and on BBX Capital’s website, www.BBXCapital.com on August 9, 2023.
Financial Results
The following selected information relates to the financial results of the Company’s principal holdings: BBX Capital Real Estate, BBX Sweet Holdings, and Renin.
BBX Capital Real Estate - Selected Financial Data
Selected highlights of BBX Capital Real Estate’s (“BBXRE”) financial results include:
Second Quarter 2023 Compared to Second Quarter 2022:
-
Revenues of
vs.$45.8 million $9.9 million -
Net profits from sales of real estate inventory to homebuilders of
vs.$3.5 million $4.9 million -
Recoveries from loan losses of
vs.$2.5 million $3.3 million -
Equity in net earnings of unconsolidated real estate joint ventures of
vs.$0.7 million $19.2 million -
Income before income taxes of
vs.$4.3 million $25.1 million
BBXRE’s operating results for the quarter ended June 30, 2023 as compared to the same 2022 period primarily reflect (i) a net decrease in equity in net earnings of unconsolidated joint ventures primarily due to sales activity during the 2022 period, (ii) a net loss from the Altman Companies' operations during the 2023 period, (iii) lower net profits from the sale of lots to homebuilders at the Beacon Lake Community development, and (iv) a net decrease in recoveries from loan losses. The net decrease in equity in net earnings of unconsolidated joint ventures was primarily due to (i) the Altis Little Havana joint venture’s sale of its multifamily apartment community in 2022, (ii) BBXRE’s sale of its equity interest in the
BBX Sweet Holdings - Selected Financial Data
Selected highlights of BBX Sweet Holdings’ financial results include:
Second Quarter 2023 Compared to Second Quarter 2022:
-
Trade sales of
vs.$35.0 million $35.6 million -
Gross margin of
vs.$13.1 million $15.0 million -
Gross margin percentage of
37.5% vs.42.1% -
Depreciation and amortization of
vs$2.3 million $1.6 million -
Loss before income taxes of
vs.$(2.5) million $(0.2) million
BBX Sweet Holdings’ operating results for the quarter ended June 30, 2023 as compared to the same 2022 period primarily reflect (i) an increase in IT’SUGAR’s loss before income taxes primarily as a result of higher occupancy, payroll, and depreciation expenses, which includes the impact of new store locations opened in 2022 and 2023, partially offset by higher sales, which is primarily attributable to the impact of new and expanded store locations, as comparable store sales declined in 2023 as compared to 2022 and (ii) an increase in Las Olas Confections and Snacks’ loss before income taxes, which reflects lower sales volume, a customer return related to a product recall, and higher costs of product.
Renin - Selected Financial Data
Selected highlights of Renin’s financial results include:
Second Quarter 2023 Compared to Second Quarter 2022:
-
Trade sales of
vs.$24.3 million $35.1 million -
Gross margin of
vs.$1.9 million $0.8 million -
Gross margin percentage of
7.9% vs.2.3% -
Loss before income taxes of
vs.$(3.7) million $(3.9) million
Renin’s operating results for the quarter ended June 30, 2023 as compared to the same 2022 period reflect (i) a modest improvement in Renin’s gross margin and gross margin percentage as a result of various factors, including price increases, a decrease in rates for shipping products from overseas, and various initiatives implemented by Renin in an effort to reduce costs associated with its manufacturing and distribution facilities, including the transfer of a substantial portion of its operations in its facility located in
As of June 30, 2023, Renin was current on the payment terms under its TD Bank credit facility; however, Renin was not in compliance with its financial covenants under the facility. Further, Renin does not expect to be in compliance with its covenants in future periods as a result of its actual and expected operating results for 2023. If Renin is unable to obtain a waiver in relation to its covenants or amend the covenants under the facility to reflect its expected operating results, Renin may lose availability under its line of credit, may be required to provide additional collateral, or may be required to repay all or a portion of its borrowings, any of which would have a material adverse effect on the Company's liquidity, financial position, and results of operations.
About BBX Capital, Inc.: BBX Capital, Inc. (OTCQX: BBXIA) (PINK: BBXIB) is a
Forward-Looking Statements
This press release contains forward-looking statements based largely on current expectations of BBX Capital and its subsidiaries 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 and can be identified by the use of words or phrases such as “plans,” “believes,” “will,” “expects,” “anticipates,” “intends,” “estimates,” “our view,” “we see,” “would,” and words and phrases of similar import. The forward-looking statements in this press release are also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve substantial risks and uncertainties. We can give no assurance that such expectations will prove to be correct. Actual results, performance, or achievements could differ materially from those contemplated, expressed, or implied by the forward-looking statements contained herein. Forward-looking statements are based largely on our expectations and are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. When considering forward-looking statements, the reader should keep in mind the risks, uncertainties, and other cautionary statements made in this release and in the Company’s reports filed with the Securities and Exchange Commission (“SEC”). The reader should not place undue reliance on any forward-looking statement, which speaks only as of the date made. This press release also contains information regarding the past performance of the Company and its respective investments and operations. The reader should note that prior or current performance is not a guarantee or indication of future performance. Future results could differ materially as a result of a variety of risks and uncertainties that include risks relating to general competitive, economic and market conditions impacting the industries in which the Company operates, including the residential and commercial real estate industry in which BBXRE develops, operates, manages, and invests in real estate, the home improvement industry in which Renin operates, and the sugar and confectionery industry in which BBX Sweet Holdings operates. Risks and uncertainties include risks relating to public health issues and general economic uncertainties, including, but not limited to, supply chain issues, labor shortages, current inflationary trends, and rising interest rates. Inflation may continue to pressure our margins in future periods, especially to the extent that we are not able to increase prices to customers. Many factors, including, among other things (i) consumer demand, (ii) disruptions in global supply chains, (iii) a general labor shortage and increases in the cost of hiring and maintaining employees, (iv) disruptions in credit and capital markets, (v) customer retention, including our ability to maintain our relationships with large customers, (vi)
Reference is also made to the other risks and uncertainties described in BBX Capital’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, which is expected to be filed on August 9, 2023, and then will be available on the SEC's website, https://www.sec.gov, and on BBX Capital’s website, www.BBXCapital.com, as well as BBX Capital’s Annual Report on Form 10-K for the year ended December 31, 2022 that was filed on March 15, 2023, which is currently available on the SEC's website, https://www.sec.gov, and on BBX Capital’s website, www.BBXCapital.com. The Company cautions that the foregoing factors are not exclusive and that the reader should not place undue reliance on any forward-looking statement, which speaks only as of the date made.
The following supplemental table presents BBX Capital’s Consolidating Statement of Operations (unaudited) for the three months ended June 30, 2023 (in thousands):
Revenues: |
|
BBX Capital
|
|
BBX Sweet
|
|
Renin |
|
Other |
|
Reconciling
|
|
Segment
|
|||||||
Trade sales |
|
$ |
— |
|
|
35,013 |
|
|
24,344 |
|
|
1,860 |
|
(14 |
) |
|
61,203 |
|
|
Sales of real estate inventory |
|
|
4,445 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,445 |
|
Revenue from construction contracts |
|
|
36,574 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
36,574 |
|
Real estate development and property management fees |
|
|
2,636 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,636 |
|
Interest income |
|
|
2,111 |
|
|
— |
|
|
— |
|
|
— |
|
|
(437 |
) |
|
1,674 |
|
Other revenue |
|
|
50 |
|
|
— |
|
|
— |
|
|
453 |
|
|
(191 |
) |
|
312 |
|
Total revenues |
|
|
45,816 |
|
|
35,013 |
|
|
24,344 |
|
|
2,313 |
|
|
(642 |
) |
|
106,844 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of trade sales |
|
|
— |
|
|
21,902 |
|
|
22,415 |
|
|
624 |
|
|
(14 |
) |
|
44,927 |
|
Cost of real estate inventory sold |
|
|
959 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
959 |
|
Cost of revenue from construction contracts |
|
|
38,129 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
38,129 |
|
Interest expense |
|
|
35 |
|
|
375 |
|
|
1,152 |
|
|
1 |
|
|
(863 |
) |
|
700 |
|
Recoveries from loan losses, net |
|
|
(2,507 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(2,507 |
) |
Selling, general and administrative expenses |
|
|
6,326 |
|
|
15,217 |
|
|
3,991 |
|
|
1,680 |
|
|
7,092 |
|
|
34,306 |
|
Total costs and expenses |
|
|
42,942 |
|
|
37,494 |
|
|
27,558 |
|
|
2,305 |
|
|
6,215 |
|
|
116,514 |
|
Operating income (losses) |
|
|
2,874 |
|
|
(2,481 |
) |
|
(3,214 |
) |
|
8 |
|
|
(6,857 |
) |
|
(9,670 |
) |
Equity in net earnings of unconsolidated real estate joint ventures |
|
|
728 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
728 |
|
Gain on the consolidation of investment in real estate joint ventures |
|
|
27 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
27 |
|
Other income (loss) |
|
|
649 |
|
|
24 |
|
|
(5 |
) |
|
6 |
|
|
42 |
|
|
716 |
|
Foreign exchange loss |
|
|
— |
|
|
(18 |
) |
|
(470 |
) |
|
— |
|
|
— |
|
|
(488 |
) |
Income (loss) before income taxes |
|
$ |
4,278 |
|
|
(2,475 |
) |
|
(3,689 |
) |
|
14 |
|
|
(6,815 |
) |
|
(8,687 |
) |
The following supplemental table presents BBX Capital’s Consolidating Statement of Operations (unaudited) for the three months ended June 30, 2022 (in thousands):
|
|
BBX Capital
|
|
BBX Sweet
|
|
Renin |
|
Other |
|
Reconciling
|
|
Segment
|
|||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Trade sales |
|
$ |
— |
|
|
35,602 |
|
|
35,093 |
|
|
1,895 |
|
(5 |
) |
|
72,585 |
|
|
Sales of real estate inventory |
|
|
8,737 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
8,737 |
|
Interest income |
|
|
629 |
|
|
— |
|
|
— |
|
|
— |
|
|
592 |
|
|
1,221 |
|
Other revenue |
|
|
506 |
|
|
— |
|
|
— |
|
|
848 |
|
|
(204 |
) |
|
1,150 |
|
Total revenues |
|
|
9,872 |
|
|
35,602 |
|
|
35,093 |
|
|
2,743 |
|
|
383 |
|
|
83,693 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of trade sales |
|
|
— |
|
|
20,622 |
|
|
34,305 |
|
|
676 |
|
|
(5 |
) |
|
55,598 |
|
Cost of real estate inventory sold |
|
|
3,878 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3,878 |
|
Interest expense |
|
|
— |
|
|
222 |
|
|
776 |
|
|
— |
|
|
(489 |
) |
|
509 |
|
Recoveries from loan losses, net |
|
|
(3,289 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(3,289 |
) |
Selling, general and administrative expenses |
|
|
3,362 |
|
|
14,982 |
|
|
4,273 |
|
|
1,658 |
|
|
5,786 |
|
|
30,061 |
|
Total costs and expenses |
|
|
3,951 |
|
|
35,826 |
|
|
39,354 |
|
|
2,334 |
|
|
5,292 |
|
|
86,757 |
|
Operating income (losses) |
|
|
5,921 |
|
|
(224 |
) |
|
(4,261 |
) |
|
409 |
|
|
(4,909 |
) |
|
(3,064 |
) |
Equity in net earnings of unconsolidated real estate joint ventures |
|
|
19,154 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
19,154 |
|
Other income |
|
|
5 |
|
|
6 |
|
|
— |
|
|
— |
|
|
92 |
|
|
103 |
|
Foreign exchange gain |
|
|
— |
|
|
— |
|
|
357 |
|
|
— |
|
|
— |
|
|
357 |
|
Income (loss) before income taxes |
|
$ |
25,080 |
|
|
(218 |
) |
|
(3,904 |
) |
|
409 |
|
|
(4,817 |
) |
|
16,550 |
|
The following supplemental table presents BBX Capital’s Consolidating Statement of Operations (unaudited) for the six months ended June 30, 2023 (in thousands):
Revenues: |
|
BBX Capital
|
|
BBX Sweet
|
|
Renin |
|
Other |
|
Reconciling
|
|
Segment
|
|||||||
Trade sales |
|
$ |
— |
|
|
67,738 |
|
|
52,320 |
|
|
4,876 |
|
(17 |
) |
|
124,917 |
|
|
Sales of real estate inventory |
|
|
6,217 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6,217 |
|
Revenue from construction contracts |
|
|
61,611 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
61,611 |
|
Real estate development and property management fees |
|
|
4,247 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,247 |
|
Interest income |
|
|
4,085 |
|
|
— |
|
|
— |
|
|
— |
|
|
106 |
|
|
4,191 |
|
Other revenue |
|
|
101 |
|
|
— |
|
|
— |
|
|
889 |
|
|
(331 |
) |
|
659 |
|
Total revenues |
|
|
76,261 |
|
|
67,738 |
|
|
52,320 |
|
|
5,765 |
|
|
(242 |
) |
|
201,842 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of trade sales |
|
|
— |
|
|
42,448 |
|
|
48,422 |
|
|
1,481 |
|
|
(17 |
) |
|
92,334 |
|
Cost of real estate inventory sold |
|
|
1,537 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,537 |
|
Cost of revenue from construction contracts |
|
|
62,318 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
62,318 |
|
Interest expense |
|
|
46 |
|
|
707 |
|
|
2,273 |
|
|
2 |
|
|
(1,593 |
) |
|
1,435 |
|
Recoveries from loan losses, net |
|
|
(3,107 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(3,107 |
) |
Selling, general and administrative expenses |
|
|
12,566 |
|
|
29,758 |
|
|
7,839 |
|
|
3,838 |
|
|
14,083 |
|
|
68,084 |
|
Total costs and expenses |
|
|
73,360 |
|
|
72,913 |
|
|
58,534 |
|
|
5,321 |
|
|
12,473 |
|
|
222,601 |
|
Operating income (losses) |
|
|
2,901 |
|
|
(5,175 |
) |
|
(6,214 |
) |
|
444 |
|
|
(12,715 |
) |
|
(20,759 |
) |
Equity in net earnings of unconsolidated real estate joint ventures |
|
|
1,832 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,832 |
|
Gain on the consolidation of The Altman Companies |
|
|
6,195 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6,195 |
|
Gain on the consolidation of investment in real estate joint ventures |
|
|
10,882 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
10,882 |
|
Other (expense) income |
|
|
344 |
|
|
224 |
|
|
(4 |
) |
|
2,262 |
|
|
61 |
|
|
2,887 |
|
Foreign exchange loss |
|
|
— |
|
|
(32 |
) |
|
(502 |
) |
|
— |
|
|
— |
|
|
(534 |
) |
Income (loss) before income taxes |
|
$ |
22,154 |
|
|
(4,983 |
) |
|
(6,720 |
) |
|
2,706 |
|
|
(12,654 |
) |
|
503 |
|
The following supplemental table presents BBX Capital’s Consolidating Statement of Operations (unaudited) for the six months ended June 30, 2022 (in thousands):
Revenues: |
|
BBX Capital
|
|
BBX Sweet
|
|
Renin |
|
Other |
|
Reconciling
|
|
Segment
|
|||||||
Trade sales |
|
$ |
— |
|
|
64,959 |
|
|
68,581 |
|
|
4,800 |
|
(6 |
) |
|
138,334 |
|
|
Sales of real estate inventory |
|
|
15,207 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
15,207 |
|
Interest income |
|
|
1,174 |
|
|
— |
|
|
— |
|
|
— |
|
|
1,196 |
|
|
2,370 |
|
Net gains on sales of real estate assets |
|
|
1,329 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,329 |
|
Other revenue |
|
|
1,022 |
|
|
— |
|
|
— |
|
|
1,293 |
|
|
(386 |
) |
|
1,929 |
|
Total revenues |
|
|
18,732 |
|
|
64,959 |
|
|
68,581 |
|
|
6,093 |
|
|
804 |
|
|
159,169 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cost of trade sales |
|
|
— |
|
|
38,995 |
|
|
66,079 |
|
|
1,535 |
|
|
(5 |
) |
|
106,604 |
|
Cost of real estate inventory sold |
|
|
6,113 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6,113 |
|
Interest expense |
|
|
— |
|
|
469 |
|
|
1,342 |
|
|
1 |
|
|
(767 |
) |
|
1,045 |
|
Recoveries from loan losses, net |
|
|
(3,937 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(3,937 |
) |
Impairment losses |
|
|
— |
|
|
64 |
|
|
— |
|
|
— |
|
|
— |
|
|
64 |
|
Selling, general and administrative expenses |
|
|
5,760 |
|
|
27,657 |
|
|
8,933 |
|
|
3,657 |
|
|
11,418 |
|
|
57,425 |
|
Total costs and expenses |
|
|
7,936 |
|
|
67,185 |
|
|
76,354 |
|
|
5,193 |
|
|
10,646 |
|
|
167,314 |
|
Operating income (losses) |
|
|
10,796 |
|
|
(2,226 |
) |
|
(7,773 |
) |
|
900 |
|
|
(9,842 |
) |
|
(8,145 |
) |
Equity in net earnings of unconsolidated real estate joint ventures |
|
|
20,686 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
20,686 |
|
Other (expense) income |
|
|
(8 |
) |
|
878 |
|
|
— |
|
|
2 |
|
|
215 |
|
|
1,087 |
|
Foreign exchange gain |
|
|
— |
|
|
— |
|
|
168 |
|
|
— |
|
|
— |
|
|
168 |
|
Income (loss) before income taxes |
|
$ |
31,474 |
|
|
(1,348 |
) |
|
(7,605 |
) |
|
902 |
|
|
(9,627 |
) |
|
13,796 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230809782306/en/
Investor Relations Contact:
Leo Hinkley, Managing Director, Investor Relations Officer
954-940-5300, Email: LHinkley@BBXCapital.com
Media Relations Contact:
Kip Hunter, Kip Hunter Marketing
954-303-5551, Email: kip@kiphuntermarketing.com
Source: BBX Capital, Inc.
FAQ
What are BBX Capital's financial results for the second quarter of 2023?
What challenges are BBX Capital's portfolio companies facing?