Item 1. BUSINESS.
Summary
Bluegreen Corporation, together with its subsidiaries (the "Company"), is the successor to a real estate business that was formed as a sole proprietorship in 1966 and incorporated in 1976. As approved at a special meeting of the Company's shareholders held in February, 1996, the Company changed its name from Patten Corporation to Bluegreen Corporation in March, 1996. The Company's real estate operations are currently managed under three divisions. The Land Division acquires large acreage tracts of real estate which are subdivided, improved and sold, typically on a retail basis. The Resorts Division acquires and develops timeshare property to be sold in vacation ownership intervals, whereby fixed week intervals or undivided fee simple interests are sold in fully-furnished vacation units. The Communities Division is engaged in the sale of manufactured homes on residential land parcels at a North Carolina project as well as the sale of residential lots primarily in three additional southeastern projects.
The Land Division is segregated into two broad property types offered for sale to prospective customers: (i) land intended for residential use and (ii) land intended for general recreational use. Land intended for residential use is fully improved and generally includes provisions for water, electricity and telephone as well as the construction of access roads leading to the subdivided lots. General recreational property is typically used for hunting, fishing and camping or as a potential homesite in the longer-term.
The Company's Resorts Division, introduced in 1994, is responsible for the development and operation of timeshare properties which are located in popular, regional family vacation destinations. The Division is also responsible for the marketing and sale of timeshare interests in its resorts, generally through one week vacation ownership intervals.
Under the Company's Communities Division, factory-built manufactured home and lot packages are marketed in a North Carolina development. In addition, residential lots from two other projects in North Carolina and a project in Orlando, Florida are being developed and sold. The North Carolina land inventories were acquired prior to the formation of the investment committee. (defined below). Sales of the North Carolina inventories are expected to yield gross margins lower than those historically experienced under the Land Division. The Company is liquidating its current communities inventories through a combination of bulk sales and retail sales and the Company does not intend to expand its communities related activities beyond the projects currently being marketed.
The Company recorded provisions for the write-down of certain inventories totaling $8.2 million during the first quarter of fiscal 1997. See "Results of Operations" under Management's Discussion and Analysis of Financial Condition and Results of Operations which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
The Company's Land, Resorts and Communities divisions accounted for 66% ($72.6 million), 25% ($27.4 million) and 9% ($9.7 million), respectively, of consolidated sales of real estate for fiscal 1997. See Management's Discussion and Analysis of Financial Condition and Results of Operations which is incorporated by reference into Item 7, Part II herein from the Company's 1997 Annual Report.
All inventory acquisitions require the prior approval of the Company's investment committee, which consists of certain executive officers of the Company (the "Investment Committee"). The Company seeks to reduce its cash outlay and risks by making small downpayments when contracting to acquire properties and, in the case of the Land Division, by completing as many preparations for resale as possible before actually completing the purchase. The Company has historically acquired substantially all of the inventory it has placed under contract. The downpayment and any preliminary development costs are the only amounts at risk if the Company fails to complete a purchase. See "Acquisition of Inventory".
The Company seeks external sources of capital to fund its property acquisitions. Such sources generally consist of seller, bank or similar financial institution term financing. In addition, the Company has secured lines-of-credit for the acquisition and development of its inventories. See Management's Discussion and
Analysis of Financial Condition and Results of Operations which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report. The aggregate amount of inventory acquisition and development funded through term financing and lines-of-credit during fiscal 1997, 1996 and 1995 totaled $26.9 million or 29%, $12.4 million or 18% and $23.1 million or 32%, respectively.
The Company's continued growth depends upon obtaining outside sources of capital to finance new property purchases and development, fund operations, satisfy debt obligations and provide loans to purchasers of land parcels and timeshare vacation ownership intervals. In the past, the Company has funded its activities through various sources, including borrowings under secured and unsecured lines-of-credit, sales of notes receivables and the sale of debt and equity securities. These arrangements require the Company to comply with certain covenants and retain certain contingent liabilities. As of March 30, 1997, the Company had outstanding $34.7 million of 8.25% convertible subordinated debentures, $21.1 million in receivable-backed notes payable and $35.9 million in lines-of-credit and notes payable, with an aggregate weighted average interest rate on all such indebtedness of 9.0% at March 30, 1997. The Company anticipates that it will continue to require external sources of capital. See Management's Discussion and Analysis of Financial Condition and Results of Operations which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
The Company begins to market parcels under its Land Division as soon as practicable, with the sale of acquired properties typically being completed within 24 months from closing of the acquisition. The holding period may be extended in areas where the subdivision approval process is more complex or in certain larger projects. Land Division sales were $72.6 million, $84.9 million and $72.6 million for fiscal 1997, fiscal 1996 and 1995, respectively.
To minimize the risk associated with holding its timeshare inventory, the Resorts Division sells vacation ownership intervals during construction. Resorts Division sales were $27.4 million, $13.8 million and $5.9 million for fiscal 1997 1996 and 1995, respectively.
The Company seeks to minimize market exposure for inventory held by the Communities Division by limiting the number of factory-built homes that are purchased on a speculative basis. The Company attempts to obtain contracts for sales of homes prior to development. Communities Division sales were $9.7 million, $14.7 million and $13.4 million for fiscal 1997, 1996 and 1995, respectively.
For information on the Company's revenue recognition policy, see Note 1 to the Consolidated Financial Statements which are incorporated by reference into Item 8, Part II herein from the 1997 Annual Report.
The Company offers financing of up to 90% of the purchase price of land real estate sold to all purchasers who qualify for such financing. The Company also offers financing of up to 90% of the purchase price to timeshare purchasers. Sales of factory-built manufactured homes under the Communities Division are financed by third party lenders and, accordingly, the proceeds of such sales are received entirely in cash. The Company structures its sales and financing activities so that the purchase money mortgages arising from land sales and the contracts for deed from timeshare sales loans (the "Receivables") may be pledged or sold in separate financing transactions to provide liquidity for the Company. This liquidity allows the Company to continue to provide financing to its customers for the sale of land and vacation ownership intervals. During fiscal 1997, 1996 and 1995, the Company financed 30%, 26% and 24%, respectively, of its aggregate sales of real estate which closed during the applicable period and received cash for the remaining amounts. See "Customer Financing" and Management's Discussion and Analysis of Financial Condition and Results of Operations which is incorporated by reference into Item 7, Part II herein from the Company's 1997 Annual Report.
The Receivables originated by the Company are typically pledged to financial institutions or sold in private placement transactions. In recent years, private placement Real Estate Mortgage Investment Conduit ("REMIC") financings have provided substantial capital resources to the Company. To date, REMIC transactions have included land receivables. In these transactions, (i) the Company sells or otherwise absolutely transfers a pool of mortgage loans to a newly-formed special purpose subsidiary, (ii) the subsidiary sells the mortgage loans to a trust in exchange for certificates representing the entire beneficial ownership in the trust and (iii) the subsidiary sells one or more senior classes of the certificates to an institutional investor in a private placement and retains the remaining certificates, which remaining certificates are subordinated to the senior classes. See Management's Discussion and Analysis of Financial Condition and Results of Operations which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
At March 30, 1997, the Company had 453 full-time and 45 part-time employees. The Company's executive offices are located at 5295 Town Center Road, Boca Raton, Florida 33486. Its telephone number at such address is (561) 361-2700.
The Company's common stock is listed on the New York Stock Exchange and on the Pacific Stock Exchange under the symbol "BXG." The Company's 8.25% convertible subordinated debentures due 2012 are also listed on the NYSE.
Acquisition of Inventory
In order to provide centralized and uniform controls on the type, location and amount of inventory that the Company acquires, all inventory acquisitions have required the approval of the Investment Committee since 1989. The Investment Committee is comprised of George F. Donovan, President and Chief Executive Officer; Daniel C. Koscher, Senior Vice President, Land Division; L. Nicholas Gray, Senior Vice President, Resorts Division and Patrick E. Rondeau, Vice President, Director of Legal Affairs and Clerk. The Investment Committee reviews each proposed acquisition to determine whether the property meets certain criteria. The Investment Committee considers such established criteria as the economic conditions in the area in which the parcel is located, environmental sensitivity, availability of financing, whether the property is consistent with the Company's general policies and the anticipated ability of that property to produce acceptable profit margins and cash flow. Since the establishment of the Investment Committee, sales of property approved by it have generally resulted in average gross margins of at least 55%. No assurances can be given that future sales of property approved by the Investment Committee will yield comparable gross margins. Prior to the formation of the Investment Committee, the determination of whether to buy most properties was typically made by the Company's regional managers, together with one or more members of the Company's senior management.
Land Division
The Land Division, through the Company's regional offices, and subject to Investment Committee review and approval, typically acquires inventory that (i) is located within one to three hours of a major city, (ii) is suitable for subdivision, (iii) maintains attractive topographical features and (iv) will result in an acceptable profit margin and cash flow to the Company based upon anticipated resale value. Properties are generally subdivided for resale into parcels ranging in size from one to 35 acres. In fiscal 1997, the Company acquired 19,254 acres in 23 separate transactions for a total purchase price of $29.7 million, or $1,541 per acre. These properties ranged in size from seven to 4,454 acres. Seller, bank or similar financial institution financing of $15.0 million, or 51% of the $29.7 million total purchase price, was obtained.
The Land Division has several specialists who assist regional management in locating inventory for acquisition. The Company has established contacts with numerous land owners and real estate brokers in many of its market areas, and because of such contacts and its long history of acquiring properties, the Company is generally in a favorable position to learn of available inventory. The Company's objective is to develop strong relationships with major property owners and brokers. Regional offices regularly contact property owners, such as timber companies, financial institutions and real estate brokers, by a combination of telephone, mail and personal visits. In addition, the Company occasionally places advertisements in local and national newspapers indicating an interest in acquiring land. To date, the Company's regional offices generally have been able to locate and acquire adequate quantities of inventory which meet the criteria established by the Investment Committee to support their operational activities.
Once an appropriate property is located, the Company begins performing due diligence procedures and enters into a purchase agreement with the seller. It is generally the Company's policy to advance only a small downpayment of 1% - 3% of the purchase price when signing a contract to acquire inventory and to limit the liquidated damages associated with such contracts to the amount of its downpayment and any preliminary development costs. In most cases, the Company is not required to advance the full purchase price or enter into a note payable obligation until regulatory approvals for the subdivision and sale of at least the initial phase of the project have been obtained. While local approvals are being sought, the Company will, in certain instances, engage in test marketing of the subdivided parcels and, with the consent of the seller and the knowledge of prospective purchasers, occasionally attempt to pre-sell parcels, subject to closing its purchase of the property. When the necessary regulatory approvals have been received, the closing on the property occurs and the Company obtains title. The time between execution of a purchase agreement and closing on a property has generally been six to 12 months. Although the Company generally retains the right to cancel purchase agreements without any loss beyond forfeiture of the downpayment and preliminary development costs, few purchase agreements have been canceled historically.
By requiring, in most cases, that regulatory approvals be obtained prior to closing and by making small downpayments upon signing purchase agreements, the Company is typically able to place a number of properties under contract without expending significant amounts of cash. This strategy enables the Company's Land Division to reduce (i) the time during which it actually owns specific properties, (ii) the market risk associated with holding real estate and (iii) the risk of acquiring property that may not be suitable for sale. It also provides a source of available properties to meet customer demand. In certain instances, however, the Company has acquired properties and then held such properties until their prime marketing seasons.
Prior to closing on a purchase of inventory, the Company's policy is to complete its own environmental assessment of the property. The purpose of the Company's assessment is to evaluate the impact the proposed subdivision will have on such items as flora and fauna, wetlands, endangered species, open space, scenic vistas, recreation, transportation and community growth and character. To obtain this information, the Company's acquisition specialists typically consult with various groups and agencies including the appropriate county and state planning agencies, environmental groups, state heritage programs, soil conservation agencies and forestry groups. If the Company's environmental assessment indicates that the proposed subdivision meets environmental criteria and complies with zoning, building, health and other laws, the Company develops a formal land use plan, which forms a basis for determining an appropriate acquisition price. The Company attempts, where possible, to accommodate the existing topographical features of the land, such as streams, hills, wooded areas, stone walls, farm buildings and roads. Prior to closing on an acquisition, the Company will typically have the property surveyed by a professional surveyor and have soil analyses conducted to determine the suitability of the site for septic systems. At closing, the Company obtains title insurance on the property.
Resorts Division
The Company obtains information with respect to resort acquisition opportunities through interaction by the Company's management team with resort operators, lodging companies or financial institutions with which the Company has established business relationships. To date, all resorts have been purpose-built for timesharing use. The Company's Resorts Division employs due diligence procedures similar to those used by the Land Division in acquiring property for future resorts. A full property review, including an environmental assessment, is presented to the Investment Committee for approval prior to purchase. During the review process, acquisition specialists analyze market, tourism and demographic data as well as the quality and diversity of the location's existing attractions to determine the availability of a variety of recreational opportunities for prospective purchasers. Specifically, the Company evaluates the following factors, among others, to determine the viability of a potential new timeshare resort: (i) supply versus demand ratios for vacation intervals in the particular market, (ii) alternative lodging establishments in the relevent market, (iii) barriers to entry that would limit competition and (iv) the market's growth as a vacation destination. While the Company's Land Division inventory is expected to turn frequently, the Company anticipates that each of its timeshare resorts will generally have a sell-out term of about seven years.
During the year ended March 30, 1997, the Company acquired 8 acres located in Gatlinburg, Tennessee in two separate transactions for an aggregate purchase price of $100,000. The acreage purchased is contiguous with the Company's Mountainloft project and will be used for additional unit development.
Communities Division
The land supporting the subdivisions managed under the Communities Division was acquired by the Company primarily in the late 1980's and comprises three properties in North Carolina and one property in Florida. The Company entered into the housing industry during fiscal 1994, primarily as a means to accelerate lot sales of these older projects. The Company does not intend to expand its communities related activities beyond the projects currently being marketed.
The Company's net inventory as of March 30, 1997 and March 31, 1996 summarized by division and classified by major geographic region is set forth in the tables to follow.
(1) Resorts Division inventory as of March 30, 1997, consists of land inventory of $5.4 million and $22.1 million of unit construction-in-progress. Resorts Division inventory as of March 31, 1996, consists of land inventory of $6.1 million and $9.9 million of unit construction-in-progress.
(2) Communities Division inventory as of March 30, 1997, consists of land inventory of $1.5 million and $4.2 million of housing unit construction-in-progress. Communities Division inventory as of March 31, 1996, consists of land inventory of $10.5 million and $3.7 million of housing unit construction-in-progress.
The Company attempts to maintain inventory at a level adequate to support anticipated sales of real estate in its various operating regions. In addition, in its Land Division, the Company has (since 1996) committed more resources to fewer projects in locations where the Company has historically achieved strong operating results such as Texas (Southwest), North Carolina and South Carolina (Southeast), Tennessee (Midwest), Virginia (Mid-Atlantic) and Arizona (West).
The following table sets forth additional data with respect to each of the properties managed under the Resorts Division.
(1) The number of units completed, under construction or planned are intended to be sold in 52 weekly intervals.
(2) There can be no assurance that the Company will have the resources to complete all such planned units or that such units will be sold at favorable prices. See "Uses of Capital" under Management's Discussion and Analysis of Financial Condition which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
There are inherent risks associated with carrying increased levels of inventory. In the event that the market for real estate or the economy in general experiences a downturn in the Company's markets of operations, the Company's ability to sell inventory at current rates of sales could be materially adversely affected. If inventory is not sold as planned, the Company will incur additional carrying costs. For further information on the Company's inventory holdings, see "Uses of Capital" under Management's Discussion and Analysis of Financial Condition which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
Marketing and Sale of Inventory
Land Division
In general, as soon as a property has been acquired and during the time period that appropriate improvements are being completed, the Company establishes selling prices for the individual parcels taking into account such matters as regional economic conditions, quality as a building site, scenic views, road frontage and natural features such as lakes, mountains, streams, ponds and wooded areas. The Company also considers recent sales of comparable parcels in the area. Initial decisions on pricing of parcels in a given area are made by the Company's regional managers and, in all cases, are subject to approval by the Investment Committee.
The most widely used marketing technique is advertising in major newspapers in metropolitan areas located within a one to three hour drive from the property. The Company also advertises its land properties in local newspapers. A sales representative who is knowledgeable about the property answers each inquiry, discusses the property with the prospective purchaser, attempts to ascertain the purchaser's needs and determine whether the parcel would be suitable for that person, and arranges an appointment for the purchaser to visit the property. Substantially all prospective customers inspect a property before purchasing. The Land Division also conducts direct mail campaigns to market property through the use of brochures describing available parcels, as well as television and radio advertising. During fiscal 1997, the Land Division incurred $6.3 million in advertising expense, or 9% of the division's $72.6 million in sales.
The success of the Company's marketing efforts depends heavily on the knowledge and experience of its sales personnel (substantially all of whom are employees of the Company). The Company requires that, prior to initiating the marketing effort for a property, every sales representative walk the property and become knowledgeable about each parcel and applicable zoning, subdivision and building code requirements. Continued training programs are conducted, including training with regional office sales managers, weekly sales meetings and frequent site visits by an executive officer of the Company. Additionally, the sales staff is evaluated against performance standards established by the executive officers of the Company. Substantially all of a sales representative's compensation is commission-based.
The Company requires its sales staff to provide each customer with a written disclosure statement regarding the real estate to be sold prior to the time the customer signs a purchase agreement. Either a U.S. Department of Housing and Urban Development ("HUD") lot information statement, where required, or a Company generated "Vital Information Statement" sets forth relevant information with respect to, and risks associated with, the property and is signed by every purchaser. The Company believes that each information statement contains all material and relevant information a customer requires to make an informed decision as to whether or not to purchase, such as availability and estimated cost of utilities, restrictions regarding property usage, status of access roads and information regarding rescission rights.
After deciding to purchase a parcel, the buyer enters into a contract and pays the Company a deposit of at least 10% of the purchase price. It is the Company's policy to give purchasers the right to cancel purchase agreements within specified periods after execution in accordance with statutory requirements. The closing of a land sale usually occurs two to eight weeks after payment of the deposit. Upon closing of a land sale, the Company typically delivers a warranty deed and a recent survey of the property to the buyer. Title insurance is available at the purchaser's expense.
The table to follow sets forth certain information regarding sales of parcels by the Land Division for the periods indicated.
Years Ended ------------------------------------------
March 30, March 31, April 2, 1997 1996 1995 Number of parcels sold................... 2,057 2,347 2,397
Average sales price per parcel........... $38,572 $34,856 $30,969
Gross margin (1)......................... 45% 51% 57%
1) Gross margin is computed as the difference between the sales price and the related cost of inventory (including the cost of improvements, amenities and in certain cases capitalized interest), divided by the sales price. A charge of $3.4 million was recorded during 1997 for the write-down of certain inventories. See Note 4 to the Consolidated Financial Statements which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
Certain sales have been deferred under percentage of completion accounting. See Contracts Receivable and Revenue Recognition under Note 1 to the Consolidated Financial Statements which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
The table to follow sets forth the number of parcels sold and the average sales price per parcel for the Company's Land Division by geographic region for the fiscal years indicated.
For further information on sales attributable to the Company's Land Division, see "Results of Operations" under Management's Discussion and Analysis of Financial Condition and Results of Operations which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
Resorts Division
The Company requires its sales staff to provide each timeshare customer with a written disclosure statement regarding the real estate to be sold prior to the time the customer signs a purchase agreement. A public disclosure statement sets forth relevant information with respect to vacation ownership at the resort and is signed by every purchaser. The Company believes that the information statement contains all material and relevant information a customer requires to make an informed decision as to whether or not to purchase.
After deciding to purchase a vacation ownership interval, the buyer enters into a contract and pays the Company a deposit of at least 10% of the purchase price. It is the Company's policy to give all purchasers the right to cancel purchase agreements within specified periods after execution in accordance with statutory requirements. Substantially all timeshare purchasers visit the resort prior to purchasing.
In the marketing and sale of timeshare intervals, the Company generally targets family households in the middle income bracket who prefer outdoor recreational activities at destination locations. The Company's primary means of selling vacation ownership intervals is through an on-site sales presentation. The division employs various programs to reach its target market and generate prospects for these sales presentations including targeted mailings and direct mail mini-vacation invitations. The division provides hotel accommodations to prospective purchasers at reduced prices in exchange for their touring the timeshare resort. In addition, cross-marketing to current owners and referral sales are becoming more significant. Timeshare resorts are staffed with, among others, sales representatives, sales managers and an on-site manager who oversees the day-to-day operations, all of whom are employees of the Company. Sales personnel are generally experienced in resort sales and undergo ongoing Company-sponsored training. During fiscal 1997, total advertising expense for the Resorts Division was $7.6 million or 28% of the division's $27.4million in sales.
The attractiveness of vacation interval ownership has been enhanced significantly by the availability of exhange networks that allow interval owners to exchange the occupancy right in their vacation interval for a particular year, for an interval at another participating network resort at either the same or different time. The Company's resorts at March 30, 1997 qualify for exchange with Interval International, one of the largest exchange organizations.
The following table sets forth certain information for sales of intervals associated with the Company's Resorts Division for the periods indicated. Certain sales have been deferred under percentage of completion accounting. See Contracts Receivable and Revenue Recognition under Note 1 to the Consolidated Financial Statements which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
Years Ended ----------------------------------------
March 30, March 31, April 2, 1997 1996 1995 Number of intervals sold........... 3,195 1,865 952
Average sales price per interval... $8,362 $7,325 $7,119
Gross margin (1)................... 71% 67% 62%
1) Gross margin is computed as the difference between the sales price and the related cost of inventory (including the cost of improvements, amenities and in certain cases capitalized interest), divided by the sales price.
For further information on sales attributable to the Company's Resorts Division, see "Results of Operations" under Management's Discussion and Analysis of Financial Condition and Results of Operations which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
Communities Division
The Company entered into the housing industry during fiscal 1994, primarily as a means to accelerate lot sales of certain older projects in certain markets. Marketing of home and lot packages is accomplished primarily through a combination of print media, supplemented by television advertising. During fiscal 1997, total advertising expense for the division was $278,000 or 3% of the division's $9.7 million in sales. The Company works with its home purchasers in obtaining conventional bank financing through local institutions, and accordingly, all such sales are received in cash. The closing on a home sale typically occurs two to six months after payment of the deposit. Upon closing of a sale, the Company delivers a warranty deed and a recent survey of the property to the buyer. Title insurance is available at the purchaser's expense.
The following table sets forth certain information for sales associated with the Company's Communities Division for the periods indicated.
Years Ended ------------------------------------------
March 30, March 31, April 2, 1997 1996 1995 Number of homes/lots sold....... 146 206 133
Average sales price............. $66,422 $71,546 $100,866
Gross margin (1)................ 3% 10% 12%
1) Gross margin is computed as the difference between the sales price and the related cost of inventory (including the cost of improvements) divided by the sales price. A charge of $4.8 million was recorded during 1997 for the write-down of certain inventories managed under the Communities Division. See Note 4 to the Consolidated Financial Statements which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
For further information on sales attributable to the Company's Communities Division, see "Results of Operations" under Management's Discussion and Analysis of Financial Condition and Results of Operations which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
Total Sales
During fiscal 1997, sales attributable to the Company's Land, Resorts and Communities divisions was $72.6 million or 66%, $27.4 million or 25% and $9.7 million or 9%, respectively, of total consolidated revenues from sales of real estate.
The tables to follow set forth sales by geographic region and division for the years indicated.
Customer Financing
During fiscal 1997, 1996 and 1995, the Company financed 30%, 26% and 24%, respectively, of the aggregate purchase price of its sales of real estate to customers that closed during these periods and received cash for the remaining amounts. The increase in the percentage of sales financed by the Company from 1995 to 1997 is primarily attributable to an increase in timeshare sales over the same period. Timeshare sales accounted for 25% of consolidated sales of real estate during 1997, compared to 12% of consolidated sales during 1996 and 6% of sales during 1995. Almost all timeshare buyers finance with the Company (compared to 14% of land buyers in fiscal 1997).
The Company believes its financing is attractive to purchasers who find it convenient to handle all facets of the purchase of land and vacation ownership intervals through a single source and because downpayments required by the Company are similar to those required by banks and mortgage companies which offer this type of credit.
Land Division
The Company offers financing of up to 90% of the purchase price to all purchasers of its properties who qualify for such financing. The term of repayment on the financing has historically ranged from five to 15 years although the Company, by offering reduced interest rates, has been successful in encouraging customers during recent years to finance their purchases over shorter terms and provide increased downpayments. Management believes such
strategy has improved the quality of its notes receivable in recent years. An average note receivable underwritten by the Company during fiscal 1996 and 1997 has a term of ten years. Most notes receivable bear interest at a fixed interest rate or variable rate tied to the prime lending rate and are secured by a first lien on the land. During fiscal 1997, 14% of land purchasers qualified for, and received, Company financing. Such purchasers made an average downpayment of 22% of the purchase price.
Resorts Division
The Company also offers financing of up to 90% of the purchase price to its timeshare purchasers. During fiscal 1997, 94% of timeshare purchasers elected to receive the Company's financing and provided an average downpayment of 15%. The average financing extended by the Company on a timeshare interval during fiscal 1996 and 1997 provides for a term of seven years and a fixed interest rate. At the closing, the Company and the purchaser execute a contract for deed agreement. After the obligation is paid in full, the Company delivers a deed to the purchaser.
Total Loans
The weighted average interest rate on notes receivable was 13.3% and 12.4% at March 30, 1997 and March 31, 1996, respectively. The table below sets forth additional information relating to the Company's notes receivable.
March 30, 1997 March 31, 1996 Notes receivable secured by land ............... $ 12,334,283 $ 26,243,222 Notes receivable secured by timeshare intervals. 23,501,163 11,667,049 Notes receivable, gross ........................ 35,835,446 37,910,271 Reserve for loan losses......................... ( 1,216,121) ( 896,469) Notes receivable, net........................... $ 34,619,325 $ 37,013,802
Approximately 69% of the Company's notes receivable secured by land bear interest at variable rates, while approximately 31% bear interest at fixed rates. The average interest rate charged on loans secured by land was 12.0% at March 30, 1997. All of the Company's timeshare loans bear interest at fixed rates. The average interest rate charged on loans secured by timeshare intervals was 15.7% at March 30, 1997.
Loan Underwriting
Land Division
The Company has established loan underwriting criteria and procedures designed to reduce credit losses on its loan portfolio. The loan underwriting process includes reviewing the applicant's credit history, verifying employment and income as well as calculating certain debt-to-income ratios. The primary focus of the Company's underwriting is to determine the applicant's ability to repay the loan in accordance with its terms. This assessment is based on a number of factors, including the relationship of the applicant's required monthly payment to disposable income. The Company also examines the applicant's credit history through various credit reporting agencies. In order to verify an applicant's employment status, the Company generally contacts the applicant's employer. The Company also obtains current pay stubs, recent tax returns and other tax forms from the applicant. Loans by the Company are made solely to finance land sold by the Company.
Customer financing on Land Division sales requires the submission of a completed and signed credit application, purchase and sale agreement and pre-authorized checking agreement accompanied by a voided check, if applicable, to the credit department. All credit decisions are made at the Company's corporate headquarters. Loan amounts under $50,000 are approved by designated personnel located in the Company's corporate headquarters, while loan amounts of $50,000 or more require approval from a senior executive officer. In addition, rejected applications and any material exceptions to the underwriting policy are also reviewed by senior management. Customers are notified of the reasons for credit denial by mail.
The Company encourages customers to increase their downpayment and reduce the loan term through the structure of its loan programs. Customers receive a lower rate of interest as their downpayment increases and the loan term shortens. Additionally, the Company encourages its customers to make timely payments through a pre-authorized payment arrangement. Customers who do not choose a pre-authorized payment plan are charged interest at a rate which is one percent greater than the prevailing rate. Approximately 90% of purchasers using the Company's financing have historically participated in the pre-authorized payment plan.
After the credit decision has been made, the credit department categorizes the file as either approved, pending or declined. Upon receipt of a credit approval, the regional office schedules the closing with the customer. Closings are typically conducted at the office of the Company's local attorney or settlement agent, although in some cases the closing may take place at the sales site or by mail.
When the original closing documents are received from the closing agent, the Company verifies that the loan closed under terms approved by the Company's credit department. A quality control audit is performed to verify that required documents have been received and that they have been prepared and executed correctly. If any revisions are required, notification is sent to the regional office.
A loan file typically includes a copy of the signed security instrument, the mortgage note, a copy of the deed, Truth-in-Lending disclosure, purchase and sale agreement, credit application, local counsel opinion, Vital Information Statement or purchaser's acknowledgment of receipt of HUD lot information statement, HUD settlement statement and a copy of the assignment of mortgage and an original note endorsement from the Company's subsidiary originating the sale and the loan to the Company (if applicable). After the initial closing documents are received, the recorded mortgage and assignment and original title insurance policy are obtained in order to complete the loan file.
Resorts Division
The Company also extends financing for timeshare sales. Timeshare financing is not subject to the same loan underwriting criteria established for Land Division loans. Customer financing on timeshare sales requires (i) receipt of a minimum downpayment of 10% of the purchase price and (ii) a contract for deed and other closing documents between the Company and the customer. The Company encourages customers to make increased downpayments by offering a lower interest rate. In addition, customers who do not elect to participate in the Company's pre-authorized payment plan are charged interest at a rate which is one percent greater than the prevailing rate. See "Collection Policies" below.
Collection Policies
Land Division
Collection efforts and delinquency information are managed at the Company's corporate headquarters. Servicing of the Receivables is handled by a staff of experienced collectors, assisted by an on-line mortgage collection computer system. Unless circumstances otherwise dictate, collection efforts are generally made by mail and telephone. Collection efforts begin when an account is ten days past due, at which time the Company mails a reminder letter. Attempts are then made to contact the borrower via telephone to determine the reason for the delinquency and to bring the account current. The determination of how to work a delinquent loan is based upon many factors, including the borrower's payment history and the reason for the current inability to make timely payments. If no agreement is made or the borrower does not abide by the agreement, collection efforts continue until the account is either brought current or legal action is commenced. If not accelerated sooner, the Company declares the loan in default when the loan becomes 60 days delinquent. When the loan is 90 days past due, the accrual of interest is stopped (unless the loan is considered an in-substance foreclosure loan, in which case all accrued interest is reversed since the Company's means of recovery is determined to be through resale of the underlying collateral and not through collection on the note) and the Credit/Collection Manager determines the action to be taken.
Resorts Division
Consistent with industry practice in the areas where the Company has operations, timeshare Receivables are documented by contracts for deed and the Company retains title to the unit until the obligation is paid in full. Accordingly, no foreclosure process is required in the event of a default. In the event that a contract for deed becomes delinquent 10 days, a reminder letter is mailed to the customer. If the customer fails to bring the account current, a late notice is mailed when the account is 15 days delinquent (and telephone contact commences). After an account is 45 days delinquent, the Company typically sends a third letter advising the customer that such customer has 15 days within which to bring the account current. Under the terms of the contract for deed, the borrower is in default when the account becomes 60 days delinquent. At this time a default letter is sent advising the borrower that
he/she has 30 days to bring the account current or lose his/her contractual interest in the timeshare unit. When the account becomes 90 days delinquent, the Company forwards a final letter informing the purchaser that the contract for deed has been terminated. At such time, the timeshare interval can be resold to a new purchaser.
Total Receivables
At March 30, 1997, approximately 6% or $2.1 million of the aggregate $36.7 million principal amount of loans which were held by the Company or by third parties under sales transactions where the Company had a recourse liability, were more than 30 days past due. Of the $36.7 million principal amount of loans, $35.8 million were held by the Company, while approximately $840,000 were associated with programs under which the Company has a limited recourse liability. In most cases of limited recourse liability, the recourse to the Company terminates when the principal balance of the loan becomes 70% or less of the original selling price of the property underlying the loan. At March 31, 1996, approximately 7% or $2.8 million of the aggregate $39.2 million principal amount of loans which were held by the Company or by third parties under sales transactions where the Company had a recourse liability, were more than 30 days past due.
Reserve for loan losses as a percentage of period end notes receivable was 3.4% and 2.4% at March 30, 1997 and March 31, 1996, respectively. The adequacy of the Company's reserve for loan losses is determined by management and reviewed on a regular basis considering, among other factors, historical frequency of default, loss experience, present and expected economic conditions as well as the quality of Receivables. The increase in the reserve for loan losses as a percent of period end loans is primarily the result of the portfolio consisting of more timeshare receivables where historical default rates exceed those on land receivables.
The table below sets forth activity in the reserve for estimated loan losses.
Reserve for loan losses, April 2, 1995................. $1,089,652 Provision for losses................................... 344,718 Charge-offs............................................ (537,901) Reserve for loan losses, March 31, 1996................ 896,469 Provision for losses................................... 1,008,271 Charge-offs............................................ (688,619) Reserve for loan losses, March 30, 1997................ $1,216,121
Sales of Receivables/Pledging of Receivables
Since 1986, the Company has sold or pledged substantially all of its Receivables originations, generally retaining the right and obligation to service the Receivables. In the case of land receivables, the Company typically transfers the Receivables to its special purpose finance subsidiaries, which in turn enter into institutional financing transactions or securitizations. The Receivables are typically sold with limited or no recourse. In the case of Receivables pledged, the Company generally must maintain a debt to eligible collateral rate (based on outstanding principal balance of the pledged loans) of 90%. The Company is obligated to pledge additional eligible Receivables or make additional principal payments in order to maintain this collateralization rate. Repurchases and additional principal payments have not been material to date. At March 30, 1997, the Company was subject to limited recourse requirements on approximately $840,000 of Receivables sold. The delinquency on such Receivables was immaterial at March 30, 1997. See "Sources of Capital" under Management's Discussion and Analysis of Financial Condition which is incorporated by reference into Item 7, Part II herein from the 1997 Annual Report.
As discussed above, private placement REMIC financings have provided substantial capital resources to the Company. Under the terms of these transactions, the Receivables are sold to a REMIC trust and the Company has no obligation to repurchase the Receivables due to default by the borrowers. The Company does, however, have the obligation to repurchase the Receivables in the event that there is any material defect in the loan documentation and related representations and warranties as of the time of sale. See Note 8 to the Consolidated Financial Statements which are incorporated by reference into Item 8, Part II herein from the 1997 Annual Report.
Receivables Servicing
Receivables servicing includes collecting payments from borrowers and remitting such funds to the owners, lenders or investors in such Receivables, accounting for Receivables principal and interest, making advances when required, contacting delinquent borrowers, foreclosing in the event that defaults are not remedied and performing other administrative duties. The Company's obligation to provide Receivables servicing and its rights to collect fees are set forth in a servicing agreement. The Company has the obligation and right to service all of the Receivables it originates and retains the obligation and right with respect to substantially all of the Receivables it sells (through REMICs). The Company typically receives an annual servicing fee of approximately .5% of the outstanding scheduled principal balance, which is deducted from payments received on substantially all of the Company's servicing portfolio. At March 30, 1997, the Receivables servicing portfolio, representing Receivables originated and sold, approximated $71.5 million.
Customer Service
The Company emphasizes customer satisfaction and maintains two full-time customer service representatives in its Boca Raton headquarters to respond to customer inquiries. At closing, all purchasers are provided with a toll-free customer service phone number to facilitate any additional information requests. Customer service surveys are sent to each purchaser to measure customer satisfaction and to alert the Company to problems, if any.
Regulation
The real estate industry is subject to extensive regulation. The Company is subject to compliance with various federal, state and local environmental, zoning and other statutes and regulations regarding the acquisition, subdivision and sale of real estate and timeshare interests and various aspects of its financing operations. The Company believes that it is in compliance in all material respects with such regulations.
The Company's Land and Communities divisions are subject to the Interstate Land Sales Full Disclosure Act which establishes strict guidelines with respect to the marketing and sale of land in interstate commerce. HUD has enforcement powers with respect to this statute. In some instances, the Company has been exempt from HUD registration requirements because of the size or number of the subdivided parcels and the limited nature of its offerings. The Company, at its discretion, may formally request an exemption advisory opinion from HUD to confirm the exempt status of any particular offering. Several such exemption requests have been submitted to, and approved by, HUD. In those cases where the Company and its legal counsel determine parcels must be registered to be sold, the Company files registration materials disclosing financial information concerning the property, evidence of title and a description of the intended manner of offering and advertising such property. The Company bears the cost of such registration, which includes legal and filing fees. Many states also have statutes and regulations governing the sale of real estate. Consequently, the Company regularly consults with counsel for assistance in complying with federal, state and local law. The Company must obtain the approval of numerous governmental authorities for its acquisition and marketing activities and changes in local circumstances or applicable laws may necessitate the application for, or the modification of, existing approvals.
The Company's Resorts Division sells vacation ownership interests to customers through weekly intervals in fully furnished vacation units. Many state and local authorities have imposed restrictions and additional regulations on developers of vacation ownership properties. The Company's resorts in Gatlinburg, Tennessee; Pigeon Forge, Tennessee; and Myrtle Beach, South Carolina are subject to various regulatory requirements including state and local approvals. Although these restrictions have generally increased the cost of selling vacation ownership intervals, the Company has not experienced material difficulties in complying with such regulations or operating within such restrictions. In compliance with state laws, the Company provides its timeshare purchasers with a public disclosure statement which contains, among other items, detailed information about the surrounding vicinity, the resort and the purchaser's rights and obligations as an interval owner.
The Company's customer financing activities are also subject to extensive regulation, which may include, Truth-in-Lending-Reg. Z, Fair Debt Collection Practices Act, Equal Credit Opportunity Act-Reg. B, Electronic Funds Transfer Act-Reg. E, Home Mortgage Disclosure Act-Reg. C, Unfair or Deceptive Acts or Practices-Reg. AA and Right to Financial Privacy Act. The Company believes that it is in compliance in all material respects with such regulations.
Management is not aware of any pending regulatory contingencies that are expected to have a materially adverse impact on the Company.
Competition
The real estate industry is highly competitive. In each of its markets, the Company competes against numerous developers and others in the real estate business, some of which are larger and have greater financial resources than the Company. Competition may be generally smaller with respect to the Company's lot sales in the more rural markets in which it operates. The Company believes that it can compete on the basis of its reputation and the price, location and quality of the products it offers for sale, as well as on the basis of its experience in land acquisition, development and sale. Although the Resorts Division competes with various high profile and well-established operators, the Company believes that it can compete on the basis of its general reputation and the price, location and quality of its timeshare resorts. In its customer financing activities, the Company competes with banks, mortgage companies, other financial institutions and governmental agencies offering financing of real estate. In recent years, the Company has experienced increased competition with respect to the financing of land sales as evidenced by the low percentage of land sales internally financed during fiscal 1995 through fiscal 1997. The Company believes that, based on its interest rates and repayment schedules, the financing packages it offers are convenient for customers and competitive with those of other institutions which offer such financing.
Personnel
As of March 30, 1997, the Company had 453 full-time and 45 part-time employees. Of the 498 employees, 82 were located at the Company's headquarters in Boca Raton, Florida and 416 were located in regional offices throughout the United States and Canada (the field personnel include 239 field employees supporting the Company's Land Division as follows: 4 land divisional presidents, 7 land regional and district managers, 123 land sales personnel, 14 land project managers, 10 land acquisition specialists and 81 land administrative and other support personnel. In addition, the Company employed 177 field employees supporting the Company's Resorts Division as follows: 4 timeshare divisional Presidents/regional directors, 100 timeshare sales personnel, 1 director of development and 72 timeshare administrative and other support personnel). None of the Company's employees are represented by a collective bargaining unit, and the Company believes that relations with its employees generally are excellent.
Executive Officers of the Company
The following table sets forth certain information regarding the executive officers of the Company.
George F. Donovan joined the Company as a Director in 1991 and was appointed President and Chief Operating Officer in October, 1993 and Chief Executive Officer in December, 1993. Mr. Donovan was President of Leisure Management International from 1991 to 1993. From 1989 to 1991, Mr. Donovan served as President and Chief Executive Officer of Thousand Trails. Prior to that time, Mr. Donovan served as an officer of a number of other recreational real estate corporations. Mr. Donovan holds a B.S. in Electrical Engineering.
Daniel C. Koscher joined the Company in 1986. During his tenure, he has served in various financial management positions including Divisional Controller, Director of Accounting and Chief Accounting Officer. In 1990, Mr. Koscher was elected Vice President and in 1995 he became Director of Planning/Budgeting. In 1997, he became Senior Vice President, Land Division. Prior to his employment with the Company, Mr. Koscher was employed by the William Carter Company, a manufacturing company located in Needham, Massachusetts. He has also been employed by Cipher Data Products, Inc., a computer peripheral manufacturer located in San Diego, California as well as the State of Nevada as an audit agent. Mr. Koscher holds a B.B.A. in Accounting along with a M.B.A.
L. Nicholas Gray joined the Company in 1995 to oversee the Company's timeshare resorts operation and was named Senior Vice President in 1997. Mr. Gray has over 25 years of experience in the hospitality, timeshare and related resort industries. Mr. Gray served as Director of Development for Resort Condominium International, a timeshare exchange organization, from 1993 to 1994. Prior to that time, Mr. Gray was Executive Vice President and General Manager for resort developments of Thousand Trails from 1989 to 1991 and Fairfield Communities from 1979 to 1989.
Patrick E. Rondeau joined the Company in 1990 and was elected Vice President and Director of Corporate Legal Affairs. He became Clerk in 1993 and Senior Vice President in 1997. For more than five years prior to his employment with the Company, Mr. Rondeau was a senior partner of Freedmen, DeRosa & Rondeau, located in North Adams, Massachusetts, which firm serves as legal counsel to the Company on various matters. Mr. Rondeau holds a B.A. in Political Science along with a J.D.
Allan J. Herz joined the Company in 1992 and was named Director of Mortgage Operations in September, 1992. Mr. Herz was elected Vice President in 1993. From 1982 to 1992, Mr. Herz worked for AmeriFirst Federal Savings Bank based in Miami, Florida. During his 10 year tenure with the bank, he held various lending positions, the most recent being Division Vice President in Consumer Lending. Mr. Herz holds a B.B.A. and a M.B.A.
Joan A. McCormick joined the Company in 1993 as its Director of Management Information Systems and was elected Vice President in February, 1995. Ms. McCormick has over 20 years of experience in information systems management in the real estate, hotel, banking and manufacturing fields. Prior to joining the Company, Ms. McCormick was Assistant Vice President MIS for Atlantic Gulf Communities Corporation. She has also held management positions with Arvida/JMB Partners Ltd., Southeast Banking Corporation and General Motors Corporation. She holds a B.A. in Business Administration.
Susan J. Milanese joined the Company in 1988. During her tenure, she has held various management positions in the Company including Assistant to the Chief Financial Officer, Divisional Controller and Director of Accounting. In 1995, she was elected Vice President and Director of Human Resources. From 1983 to 1988, Ms. Milanese was employed by General Electric Company in various financial management positions including the corporate audit staff. Ms. Milanese holds her B.B.A in Accounting.
Mary Jo Wiegand joined the Company in 1988. During her tenure, she has held various management positions within the accounting, finance and treasury departments, including managing external financial reporting. In 1995, she was elected Vice President, Director of Investor Relations and Controller. In 1997, she was named acting Treasurer. From 1985 to 1988, Ms. Wiegand was employed by Price Waterhouse. Ms. Wiegand holds a B.S. in Accounting.
John F. Chiste will be joining the Company in July, 1997 as Treasurer and Chief Financial Officer. From January, 1997 to June, 1997, Mr. Chistee was employed by Compscript, Inc. From December, 1992 to January, 1997, he served as the Chief Financial Officer, Secretary and Treasurer of Computer Integration Corporation, a publicly held distribution company which provides information products and services to corporations nation wide. From 1983 through 1992, Mr. Chiste practiced as a Certified Public Accountant with Ernst & Young, LLP.
The Company's By-Laws provide that, except as otherwise provided by law or the charter and by-laws of the Company, the President, Treasurer and the Clerk hold office until the first meeting of the Board of Directors following the next annual meeting of shareholders and until their respective successors are chosen and qualified and that all other officers hold office for the same period unless a shorter time is specified in the vote appointing such officer or officers.
Item 2.
Item 2. PROPERTIES.
The Company's principal executive office is located in Boca Raton, Florida in approximately 17,000 square feet of leased space. On March 30, 1997, the Company also maintained regional sales offices in the Northeastern, Mid-Atlantic, Southeastern, Midwestern, Southwestern, Rocky Mountain and Western regions of the United States as well as the Province of Ontario, Canada.
Item 3.
Item 3. LEGAL PROCEEDINGS.
In the ordinary course of its business, the Company from time to time becomes subject to claims or proceedings relating to the purchase, subdivision, sale and/or financing of real estate. Additionally, from time to time, the Company becomes involved in disputes with existing and former employees. The Company believes that substantially all of the above are incidental to its business. See Note 10 to the Consolidated Financial Statements which are incorporated by reference into Item 8, Part II herein from the 1997 Annual Report.
Item 4.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
Item 5.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The information provided on page 15 of the 1997 Annual Report is incorporated herein by reference.
Item 6.
Item 6. SELECTED FINANCIAL DATA.
The information provided on page 17 of the 1997 Annual Report is incorporated herein by reference.
Item 7.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The information provided under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 18 - 33 of the 1997 Annual Report is incorporated herein by reference.
Item 8.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Consolidated Financial Statements of the Company and its subsidiaries and the related Notes thereto and report of independent certified public accountants on pages 35 - 48 of the 1997 Annual Report are incorporated herein by reference.
Item 9.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
Item 10.
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
For information with respect to the Company's Directors, see the information provided under the headings "Proposals 1 and 2 - Fixing of Number of Directors at Seven and Election of Named Directors" and "Certain Transactions and Other Information" in the Proxy Statement, which sections are incorporated herein by reference. Information concerning the executive officers of the Company appears in Part I of this Annual Report on Form 10-K.
The present members of the Board of Directors of the Company are:
Joseph C. Abeles, Private Investor George F. Donovan, President and Chief Executive Officer, Bluegreen Corporation Ralph A. Foote, Esq., Senior Partner, Conley & Foote Frederick M. Myers, Esq., Senior Partner, Cain, Hibbard, Myers & Cook J. Larry Rutherford, President and Chief Executive Officer, Atlantic Gulf Communities Corporation Stuart A. Shikiar, President, Shikiar Asset Management Inc. Bradford T. Whitmore, General Partner, Grace Brothers, Ltd.
Section 16 Compliance
The information provided under the heading "Section 16(a) Beneficial Ownership Reporting Compliance" in the Proxy Statement is incorporated herein by reference.
Item 11.
Item 11. EXECUTIVE COMPENSATION.
The information provided under the headings "Proposals 1 and 2 - Fixing of Number of Directors at Seven and Election of Named Directors," "Board of Directors and its Committees," "Compensation Committee Report on Executive Compensation", "Compensation of Chief Executive Officer", "Executive Compensation" and "Certain Transactions and Other Information" in the Company's Proxy Statement is incorporated herein by reference.
Item 12.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) The information provided under the heading "Proposals 1 and 2 - Fixing of Number of Directors at Seven and Election of Named Directors" in the Proxy Statement is incorporated herein by reference.
Item 13.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(a) The information provided under the headings "Proposals 1 and 2 - Fixing of Number of Directors at Seven and Election of Named Directors," "Executive Compensation" and "Certain Transactions and Other Information" in the Company's Proxy Statement is incorporated herein by reference.
PART IV
Item 14.
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a)(1) and (a)(2) List of Financial Statements and Schedules.
1. The following Consolidated Financial Statements and Notes thereto of the Company and its subsidiaries and the report of independent certified public accountants relating thereto, included in the 1997 Annual Report on pages 35 - 48 are incorporated by reference into Item 8 hereof: Page
Consolidated Balance Sheets as of March 30, 1997 and March 31, 1996 35
Consolidated Statements of Operations for each of the three years in the period ended March 30, 1997 36
Consolidated Statements of Shareholders' Equity for each of the three years in the period ended March 30, 1997 37
Consolidated Statements of Cash Flows for each of the three years in the period ended March 30, 1997 38 - 39
Notes to Consolidated Financial Statements 40 - 47
Report of Independent Certified Public Accountants 48
2. All financial statement schedules are omitted because they are not applicable, are not present in amounts sufficient to require submission of the schedules or the required information is presented in the Consolidated Financial Statements or related notes.
(a)(3) List of Exhibits.
The exhibits which are filed with this Annual Report on Form 10-K or which are incorporated herein by reference are set forth in the Exhibit Index which appears at pages 21 - 24 hereof.
(b) Reports on Form 8-K.
None.
(c) Exhibits.
See (a)(3) above.
(d) Financial Statement Schedules.
All financial statement schedules are omitted because they are not applicable, are not present in amounts sufficient to require submission of the schedules or the required information is presented in the Consolidated Financial Statements or related notes.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BLUEGREEN CORPORATION (Registrant)
Date: June 25, 1997 By: /s/ GEORGE F. DONOVAN George F. Donovan, President and Chief Executive Officer
Date: June 25, 1997 By: /s/ MARY JO WIEGAND Mary Jo Wiegand, Vice President, Director of Investor Relations, Treasurer and Controller (Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on the 25th day of June, 1997.
Signature Title
/s/ GEORGE F. DONOVAN President, Chief Executive Officer and Director George F. Donovan
/s/ MARY JO WIEGAND Vice President, Director of Investor Relations, Mary Jo Wiegand Treasurer and Controller (Principal Accounting Officer)
/s/ JOSEPH C. ABELES Director Joseph C. Abeles
/s/ RALPH A. FOOTE Director Ralph A. Foote
/s/ FREDERICK M. MYERS Director Frederick M. Myers
/s/ J. LARRY RUTHERFORD Director J. Larry Rutherford
/s/ STUART A. SHIKIAR Director Stuart A. Shikiar
/s/ BRADFORD T. WHITMORE Director Bradford T. Whitmore