Market Newsdesk

CommScope Reports First Quarter 2023 Results

First Quarter Highlights

• Net sales of $2.002 billion

• Core net sales of $1.664 billion*

• GAAP net loss attributable to common stockholders of $11.7 million

• Non-GAAP adjusted EBITDA of $312.0 million

• Core adjusted EBITDA of $315.3 million*

• Cash flow used in operations of $(46.1) million and non-GAAP adjusted free cash flow of $(39.7) million

* References to certain supplementary “Core” financial measures reflect the results of the Connectivity and Cable Solutions (CCS), Networking, Intelligent Cellular and Security Solutions (NICS), Outdoor Wireless Networks (OWN) and Access Network Solutions segments (ANS), in the aggregate. Core financial measures exclude the results and performance of the Home Networks (Home) segment. See the first quarter segment comparison tables below showing the aggregation of the Core financial measures.

HICKORY, N.C.–(BUSINESS WIRE)–
CommScope Holding Company, Inc. (NASDAQ: COMM), a global leader in network connectivity solutions, today reported results for the quarter ended March 31, 2023.

Summary of Consolidated Results
		Q1				Q1				% Change
		2023				2022				YOY
		(in millions, except per share amounts)
Net sales		$	2,001.5			$	2,228.6				(10.2	)%
Core net sales (1)			1,664.4				1,732.9				(4.0	)
GAAP net income (loss)			3.4				(139.9	)		NM
GAAP net loss per share			(0.06	)			(0.75	)			(92.5	)
Non-GAAP adjusted EBITDA (2)			312.0				253.3				23.2
Core adjusted EBITDA (1)			315.3				230.0				37.1
Non-GAAP adjusted net income per diluted share (2)			0.35				0.26				34.6
NM – Not meaningful
(1) “Core” financial measures reflect the results of the CCS, NICS, OWN and ANS segments, in the aggregate. Core financial measures exclude the results of the Home segment. See the first quarter segment comparison tables below showing the aggregation of the Core financial measures.
(2) See description of Non-GAAP Financial Measures and Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures below.

“CommScope delivered Core net sales of $1.66 billion and Core adjusted EBITDA of $315 million for the first quarter of 2023. This represents a 37% improvement in Core adjusted EBITDA over the first quarter of 2022 as our CommScope NEXT initiative continues to support improving EBITDA margins. I’m pleased with our team’s performance as we continue to aggressively manage the components of our business that we control. CommScope NEXT is paying dividends with strong focus on the most important initiatives. A great example of this progress is in our NICS segment where the team delivered $58 million of EBITDA in Q1, a $72 million improvement year-over-year. Current order input remains low as customers deal with high inventory levels and project delays as they manage through the uncertain economic environment. However, market feedback indicates a strong recovery in the second half as fiber deployment, infrastructure upgrades and continued need for more bandwidth drive strong market fundamentals. We are well positioned to take advantage of the growing market, as we announced more capacity additions in our fiber business during the first quarter. Based on current demand visibility driven by customer signaling a strong second half order rate, we maintain our expectation that we will deliver Core adjusted EBITDA in the $1.35 to $1.5 billion range,” said Chuck Treadway, President and Chief Executive Officer.

“We are pleased with our first quarter results as evident by the 37% Core adjusted EBITDA growth year-over year. The improved EBITDA performance allowed us to generate cash that we used to deleverage as we retired $57 million of debt in the first quarter. With our LTM Core adjusted EBITDA of $1,337 million, a 7% improvement over prior quarter, and our debt reduction, we finished the quarter at adjusted leverage ratio of 6.6x. We will continue to focus on deleveraging as we move through 2023,” said Kyle Lorentzen, Chief Financial Officer.

CommScope NEXT

Since 2021, the Company has been engaged in a transformation initiative referred to as CommScope NEXT, which is designed to drive shareholder value through three pillars: profitable growth, operational efficiency and portfolio optimization. CommScope believes these efforts are critical to making the Company more competitive and allowing it to invest in growth, de-lever and maximize stockholder and other stakeholder value in the future.

As a step in the CommScope NEXT transformation plan, in 2021, the Company announced a plan to separate the Home Networks (Home) segment. Due to the impact of the uncertain supply chain environment, capital spending pattern of customers and other macroeconomic factors related to the Home segment, the Company has delayed the separation plan but continues to analyze the financial results of its “Core” business separately from Home. As such, in this comparison discussion, reference is made to certain supplementary Core financial measures, which reflect the results of the Connectivity and Cable Solutions (CCS), Outdoor Wireless Networks (OWN), Networking, Intelligent Cellular and Security Solutions (NICS) and Access Network Solutions (ANS) segments, in the aggregate.

Impacts of Current Economic Conditions

Macroeconomic factors such as higher interest rates, inflation and concerns about a global economic slow-down have softened demand for CommScope’s products, with certain customers reducing purchases as they right-size their inventories and others pausing capital spending. This has negatively impacted the Company’s net sales for the first quarter of 2023 and may continue to negatively impact net sales further into 2023. While supply chain constraints are loosening in some segments, CommScope continues to experience shortages of memory devices, capacitors and silicon chips, which has decreased net sales and increased costs and inventory balances for certain of its segments. These shortages could continue throughout 2023. Conversely, the Company has seen favorable pricing impacts and declining freight costs that have offset the impact of lower demand and supply chain constraints. CommScope also proactively implemented cost savings initiatives that have favorably impacted its profitability in the first quarter of 2023.

First Quarter Results and Comparisons

Net sales in the first quarter of 2023 decreased 10.2% year-over-year to $2.00 billion. Core net sales decreased 4.0% year-over-year due to lower net sales in the OWN, ANS and CCS segments, partially offset by stronger sales in the NICS segment. Net sales decreased across all regions in the first quarter of 2023.

Net loss attributable to common stockholders of $11.7 million, or $(0.06) per share, in the first quarter of 2023, improved compared to the prior year period’s net loss attributable to common stockholders of $154.4 million, or $(0.75) per share. Non-GAAP adjusted net income for the first quarter of 2023 was $89.4 million, or $0.35 per share, versus $64.4 million, or $0.26 per share, in the first quarter of 2022.

Non-GAAP adjusted EBITDA increased 23.2% to $312.0 million in the first quarter of 2023 compared to the same period last year. Non-GAAP adjusted EBITDA as a percentage of net sales increased to 15.6% in the first quarter of 2023 compared to 11.4% in the same prior year period. Core segment adjusted EBITDA increased 37.1% to $315.3 million in the first quarter of 2023 compared to the same prior year period. Core segment adjusted EBITDA as a percentage of net sales increased to 18.9% in the first quarter of 2023 compared to 13.3% in the same prior year period.

Reconciliations of the reported GAAP results to non-GAAP adjusted results can be found at https://ir.commscope.com/.

First Quarter Comparisons

Sales by Region
										% Change
		Q1 2023				Q1 2022				YOY
United States		$	1,318.0			$	1,347.1				(2.2	)%
Europe, Middle East and Africa			326.5				406.4				(19.7	)
Asia Pacific			158.9				203.4				(21.9	)
Caribbean and Latin America			107.9				162.3				(33.5	)
Canada			90.2				109.4				(17.6	)
Total net sales		$	2,001.5			$	2,228.6				(10.2	)%

Segment Net Sales
										% Change
		Q1 2023				Q1 2022				YOY
CCS		$	822.8			$	838.0				(1.8	)%
NICS			284.5				188.0				51.3
OWN			258.4				390.1				(33.8	)
ANS			298.7				316.8				(5.7	)
Core net sales			1,664.4				1,732.9				(4.0	)
Home			337.1				495.7				(32.0	)
Total net sales		$	2,001.5			$	2,228.6				(10.2	)%

Segment Operating Income (Loss)
										% Change
		Q1 2023				Q1 2022				YOY
CCS		$	124.0			$	37.3				232.4	%
NICS			34.9				(43.0	)		NM
OWN			49.2				52.9				(7.0	)
ANS			(21.9	)			(6.6	)			231.8
Core operating income			186.2				40.6				358.6
Home			(33.7	)			(13.8	)			144.2
Total operating income		$	152.5			$	26.8				469.0	%

Segment Adjusted EBITDA (See “Non-GAAP Financial Measures,” below)
										% Change
		Q1 2023				Q1 2022				YOY
CCS		$	147.7			$	98.6				49.8	%
NICS			58.0				(13.8	)		NM
OWN			59.5				71.0				(16.2	)
ANS			50.1				74.2				(32.5	)
Core adjusted EBITDA			315.3				230.0				37.1
Home			(3.3	)			23.3				(114.2	)
Total segment adjusted EBITDA		$	312.0			$	253.3				23.2	%
NM – Not meaningful

• CCS – Net sales of $822.8 million decreased 1.8% from the prior year period driven by declines in Building and Data Center Connectivity products, partially offset by higher Network Cable and Connectivity product net sales.
• NICS – Net sales of $284.5 million increased 51.3% from the prior year period driven by growth in Ruckus Networks.
• OWN – Net sales of $258.4 million decreased 33.8% from the prior year period driven by declines in Base Station Antennas and HELIAX products.
• ANS – Net sales of $298.7 million decreased 5.7% from the prior year period driven by a decline in Access Technologies.
• Home– Net sales of $337.1 million decreased 32.0% from the prior year period driven by a decline in Broadband Home Solutions.

Cash Flow and Balance Sheet

• GAAP cash flow used in operations was $(46.1) million.

• Non-GAAP adjusted free cash flow was $(39.7) million after adjusting operating cash flow for $14.4 million of additions to property, plant and equipment, $19.6 million of cash paid for restructuring costs and $1.2 million of cash paid for transaction, transformation and integration costs.

• Ended the quarter with $327.3 million in cash and cash equivalents.

• As of March 31, 2023, the Company had no outstanding borrowings under its asset-based revolving credit facility and had availability of $907.3 million, after giving effect to borrowing base limitations and outstanding letters of credit. The Company ended the quarter with total liquidity of approximately $1,234.6 million.

Conference Call, Webcast and Investor Presentation

As previously announced, CommScope will host a conference call today at 8:30 a.m. ET in which management will discuss first quarter 2023 results. The conference call will also be webcast.

The live, listen-only audio of the call will be available through a link on the Events and Presentations page of CommScope’s Investor Relations website.

A webcast replay will be archived on CommScope’s website for a limited period of time following the conference call.

During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends that have occurred after quarter-end, including questions relating to the planned separation of the Home Networks business. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously.

About CommScope:

CommScope (NASDAQ: COMM) is pushing the boundaries of technology to create the world’s most advanced wired and wireless networks. Our global team of employees, innovators and technologists empower customers to anticipate what’s next and invent what’s possible. Discover more at www.commscope.com.

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Non-GAAP Financial Measures

CommScope management believes that presenting certain non-GAAP financial measures enhances an investor’s understanding of our financial performance. CommScope management further believes that these financial measures are useful in assessing CommScope’s operating performance from period to period by excluding certain items that we believe are not representative of our core business. CommScope management also uses certain of these financial measures for business planning purposes and in measuring CommScope’s performance relative to that of its competitors. CommScope management believes these financial measures are commonly used by investors to evaluate CommScope’s performance and that of its competitors. However, CommScope’s use of certain non-GAAP terms may vary from that of others in its industry. Non-GAAP financial measures should not be considered as alternatives to operating income (loss), net income (loss), cash flow from operations or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance, operating cash flows or liquidity. A reconciliation of each of the non-GAAP measures discussed herein to their most comparable GAAP measures is below.

Core Measures

CommScope believes that presenting Core financial measures enhances the investor’s understanding of the financial performance of the Company’s core businesses. Core financial measures are the aggregate of the CCS, NICS, OWN and ANS segments. They do not include the results of the Home segment. The Core segments and the Home segment represent the business segments as currently managed and reported by CommScope. Future results and the composition of any business divested in the future may vary and differ materially from the presentation of the Core financial measures.

Forward Looking Statements

This press release or any other oral or written statements made by us or on our behalf may include forward-looking statements that reflect our current views with respect to future events and financial performance. These statements may discuss goals, targets, intentions or expectations as to future plans, trends, events, results of operations or financial condition or otherwise, in each case, based on current beliefs and expectations of management, as well as assumptions made by, and information currently available to, management. These forward-looking statements are generally identified by their use of such terms and phrases as “intend,” “goal,” “estimate,” “expect,” “project,” “projections,” “plans,” “potential,” “anticipate,” “should,” “could,” “designed to,” “foreseeable future,” “believe,” “think,” “scheduled,” “outlook,” “target,” “guidance” and similar expressions, although not all forward-looking statements contain such terms. This list of indicative terms and phrases is not intended to be all-inclusive.

These forward-looking statements are subject to various risks and uncertainties, many of which are outside our control, including, without limitation, our dependence on customers’ capital spending on data, communication and entertainment equipment, which could be negatively impacted by a regional or global economic downturn, among other factors; the potential impact of higher than normal inflation; concentration of sales among a limited number of customers and channel partners; risks associated with our sales through channel partners; changes to the regulatory environment in which we and our customers operate; changes in technology; industry competition and the ability to retain customers through product innovation, introduction, and marketing; changes in cost and availability of key raw materials, components and commodities and the potential effect on customer pricing and timing of delivery of products to customers; risks related to our ability to implement price increases on our products and services; risks associated with our dependence on a limited number of key suppliers for certain raw materials and components; risks related to the successful execution of CommScope NEXT; potential difficulties in realigning global manufacturing capacity and capabilities among our global manufacturing facilities or those of our contract manufacturers that may affect our ability to meet customer demands for products; possible future restructuring actions; the risk that our manufacturing operations, including our contract manufacturers on which we rely, encounter capacity, production, quality, financial or other difficulties causing difficulty in meeting customer demands; substantial indebtedness and restrictive debt covenants; our ability to incur additional indebtedness and increases in interest rates; our ability to generate cash to service our indebtedness; the potential separation, divestiture or discontinuance of a business or product line, including uncertainty regarding the timing of the separation, achievement of the expected benefits and the potential disruption to the business; our ability to integrate and fully realize anticipated benefits from prior or future divestitures, acquisitions or equity investments; possible future impairment charges for fixed or intangible assets, including goodwill; our ability to attract and retain qualified key employees; labor unrest; product quality or performance issues, including those associated with our suppliers or contract manufacturers, and associated warranty claims; our ability to maintain effective management information technology systems and to successfully implement major systems initiatives; cyber-security incidents, including data security breaches, ransomware or computer viruses; the use of open standards; the long-term impact of climate change; significant international operations exposing us to economic risks like variability in foreign exchange rates and inflation, as well as political and other risks, including the impact of wars, regional conflicts and terrorism; our ability to comply with governmental anti-corruption laws and regulations worldwide; the impact of export and import controls and sanctions worldwide on our supply chain and ability to compete in international markets; changes in the laws and policies in the United States affecting trade, including the risk and uncertainty related to tariffs or potential trade wars and potential changes to laws and policies, that may impact our products; cost of protecting or defending intellectual property; costs and challenges of compliance with domestic and foreign social and environmental laws; the impact of litigation and similar regulatory proceedings in which we are involved or may become involved, including the costs of such litigation; the scope, duration and impact of disease outbreaks and pandemics, such as COVID-19, on our business including employees, sites, operations, customers, supply chain logistics and the global economy; our stock price volatility; income tax rate variability and ability to recover amounts recorded as deferred tax assets; and other factors beyond our control. These and other factors are discussed in greater detail in our 2022 Annual Report on Form 10-K and may be updated from time to time in our annual reports, quarterly reports, current reports and other filings we make with the Securities and Exchange Commission. Although the information contained in this press release represents our best judgment as of the date of this release based on information currently available and reasonable assumptions, we can give no assurance that the expectations will be attained or that any deviation will not be material. Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements, which speak only as of the date made. We are not undertaking any duty or obligation to update this information to reflect developments or information obtained after the date of this press release, except as otherwise may be required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230503006120/en/

Investor Contact:

Massimo Disabato, CommScope

+1 630-281-3413

[email protected]

News Media Contact:

[email protected]

KEYWORDS: North Carolina United States North America

INDUSTRY KEYWORDS: Data Management Technology Telecommunications Mobile/Wireless Networks Internet Hardware

MEDIA:

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Karuna Therapeutics Reports First Quarter 2023 Financial Results and Provides General Business Updates

Announced positive topline data from the Phase 3 EMERGENT-3 trial of KarXT in schizophrenia in the first quarter of 2023

On track to submit New Drug Application (NDA) for KarXT in schizophrenia with the U.S. FDA in the third quarter of 2023, with a launch in the second half of 2024, if approved

Phase 3 ADEPT-2 and ADEPT-3 trials of KarXT in psychosis in Alzheimer’s disease to initiate in the second half of 2023

$1.5 billion in cash expected to fund operations through 2026

Conference call and webcast to take place today at 8:00 a.m. ET

BOSTON–(BUSINESS WIRE)–
Karuna Therapeutics, Inc. (NASDAQ: KRTX), a clinical-stage biopharmaceutical company driven to create and deliver transformative medicines for people living with psychiatric and neurological conditions, today announced financial results for the first quarter of 2023 and provided a general business update.

“We’ve had a very strong start to the year,” said Bill Meury, president and chief executive officer of Karuna Therapeutics. “We announced positive data from EMERGENT-3, our third consecutive registrational trial of KarXT in schizophrenia, which further reinforces KarXT’s potential to be a completely novel and differentiated treatment for people living with schizophrenia. On the regulatory front, we remain on track to submit our NDA mid-year – specifically the third quarter – following an encouraging pre-NDA meeting with the FDA last month. We’ve also made significant progress advancing EMERGENT-4 and 5, our Phase 3 open-label trials evaluating the long-term safety of KarXT in schizophrenia, which will provide valuable information for both the NDA and medical education pre- and post-launch, with data to share next year.”

“As we continue to build the infrastructure to support the potential commercialization of KarXT in schizophrenia, we maintain a sharp focus on the execution of our ARISE program evaluating KarXT as an adjunctive treatment for schizophrenia, with anticipated topline data from the Phase 3 ARISE trial in the second half of 2024, as we activate additional sites to support recruitment in the study. We remain on track for the ADEPT program evaluating KarXT in psychosis in Alzheimer’s disease and expect topline data from the Phase 3 ADEPT-1 & 2 trials in 2025,” Mr. Meury added. “Beyond KarXT, we continue to grow our pipeline both organically and inorganically, most notably with our exclusive global in-license agreement for TRPC4/5 inhibitors for the treatment of mood and anxiety disorders announced in February, and we look forward to sharing next steps in the program later this year.”

KEY PIPELINE HIGHLIGHTS

Karuna is advancing a pipeline of novel drug candidates for the treatment of various psychiatric and neurological conditions led by KarXT (xanomeline-trospium), an oral, investigational M1/M4-preferring muscarinic agonist.

KarXT

KarXT is being evaluated in Phase 3 clinical trials as a potential treatment for schizophrenia as a monotherapy and adjunctive therapy, as well as for psychosis in Alzheimer’s disease.

• Schizophrenia
  • Announced positive results from the Phase 3 EMERGENT-3 trial in schizophrenia in the first quarter of 2023. The trial met its primary endpoint, with KarXT demonstrating a statistically significant and clinically meaningful 8.4-point reduction in Positive and Negative Syndrome Scale (PANSS) total score compared to placebo (-20.6 KarXT vs. -12.2 placebo; p<0.0001) at week 5. KarXT was generally well tolerated, with a side effect profile substantially consistent with prior trials of KarXT.
  • Additional data analyses from the EMERGENT-2 and EMERGENT-3 trials to be presented at upcoming medical congresses in the second quarter of 2023. Presentations will highlight additional new efficacy and safety data from EMERGENT-3 and data from the cognitive exploratory endpoint analyses from EMERGENT-2 and EMERGENT-3.
  • Topline data from the EMERGENT-4 and EMERGENT-5 trials evaluating the long-term safety of KarXT in schizophrenia are anticipated in 2024. EMERGENT-4 completed enrollment in the fourth quarter of 2022, and EMERGENT-5 is estimated to complete enrollment in the second quarter of 2023.
  • The Phase 1b trial evaluating the effect of KarXT on 24-hour ambulatory blood pressure in adults with schizophrenia initiated in the second quarter of 2023. Topline data from the trial is expected in the fourth quarter of 2023.
  • The Company remains on track to submit an NDA for KarXT in schizophrenia with the FDA in the third quarter of 2023 following the completion of a pre-NDA meeting in the second quarter of 2023.
• Adjunctive treatment in schizophrenia
  • The Company now anticipates topline data from the Phase 3 ARISE trial in the second half of 2024. The Company is increasing the number of sites in the trial, including additional clinical trial sites in Europe, to support recruitment.
• Psychosis in Alzheimer’s disease
  • Topline data from the Phase 3 ADEPT-1 trial is anticipated in 2025.
  • The Company is on track to initiate the Phase 3 ADEPT-2 and ADEPT-3 trials in the second half of 2023. Topline data from the Phase 3 ADEPT-2 trial is anticipated in 2025.

Early-stage and discovery programs

The Karuna pipeline also includes clinical-stage candidate KAR-2618, a TRPC4/5 inhibitor for the treatment of mood and anxiety disorders, as well as pre-clinical muscarinic, TRPC4/5, and target-agnostic compounds for the treatment of psychiatric and neurological conditions.

• Announced exclusive global license of TRPC4/5 inhibitors, including lead clinical-stage candidate KAR-2618, in the first quarter of 2023. The Company plans to share next steps on the development of KAR-2618 for the treatment of mood and anxiety disorders in the second half of 2023.

ANTICIPATED UPCOMING MILESTONES

• NDA submission of KarXT in schizophrenia (3Q 2023)

• Initiation of the Phase 3 ADEPT-2 trial (2H 2023)

• Initiation of the Phase 3 ADEPT-3 trial (2H 2023)

• Topline data from the Phase 3 EMERGENT-4 trial (2024)

• Topline data from the Phase 3 EMERGENT-5 trial (2024)

• Launch of KarXT in schizophrenia, if approved (2H 2024)

• Topline data from the Phase 3 ARISE trial (2H 2024)

• Topline data from the Phase 3 ADEPT-1 trial (2025)

• Topline data from the Phase 3 ADEPT-2 trial (2025)

FIRST QUARTER 2023 FINANCIAL RESULTS

The Company reported a net loss of $97.6 million for the first quarter of 2023, as compared to $58.2 million for the prior year period. The increase in net loss for the quarter was primarily attributable to higher operating expenses of $109.7 million compared to $58.6 million for the prior year period, driven by expenses related to the EMERGENT, ARISE and ADEPT clinical programs, NDA-supporting activities, the $15.0 million upfront license payment for Goldfinch Bio’s TRPC4/5 channel candidates, increased employee headcount across the organization, and higher stock-based compensation expense. Operating expenses were slightly offset by higher interest income driven by the increase in cash equivalents and short-term investments, as well as higher interest rates. The Company recognized licensing revenue of $0.7 million for the first quarter of 2023 associated with sales of clinical drug supply to Zai Lab (Shanghai) Co., Ltd. No license revenue was recognized for the prior year period.

Research and development expenses were $85.5 million for the first quarter of 2023, as compared to $43.8 million for the prior year period. The increase in research and development expenses for the quarter was primarily driven by the EMERGENT, ARISE and ADEPT clinical programs, NDA-supporting activities, the upfront license payment for Goldfinch Bio’s TRPC4/5 channel candidates, personnel-related costs due to the increase in employee headcount, and higher stock-based compensation expense.

General and administrative expenses were $24.3 million for the first quarter of 2023, as compared to $14.8 million for the prior year period. The increase in general and administrative expenses for the quarter was primarily driven by an increase in pre-commercialization activities, professional fees, employee headcount, and higher stock-based compensation expense.

The Company ended the quarter with $1.5 billion in cash, cash equivalents, and available-for-sale investment securities compared to $1.1 billion as of December 31, 2022. The increase was primarily the result of the completion of the Company’s follow-on public offering in March 2023, which resulted in net proceeds of $436.7 million. The Company expects that current cash, cash equivalents, and available-for-sale investment securities as of March 31, 2023 will enable the Company to fund its operating expenses and capital expenditure requirements through the end of 2026.

CONFERENCE CALL AND WEBCAST DETAILS

The first quarter 2023 financial results and business update will be discussed during a conference call and webcast today at 8:00 a.m. ET. A webcast of the live call may be accessed on the Investors section of the Karuna website at investors.karunatx.com. A replay of the webcast will be available for up to 30 days following the event.

About Karuna Therapeutics

Karuna Therapeutics is a clinical-stage biopharmaceutical company driven to create and deliver transformative medicines for people living with psychiatric and neurological conditions. At Karuna, we understand there is a need for differentiated and more effective treatments that can help patients navigate the challenges presented by these severe and disabling disorders. Utilizing our extensive knowledge of neuroscience, we are harnessing the untapped potential of the brain in pursuit of novel pathways to develop medicines that make meaningful differences in peoples’ lives. For more information, please visit www.karunatx.com.

Forward Looking Statements

This press release contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our expectations about the timing of our ongoing and planned clinical trials and regulatory filings, our goals to develop and commercialize our product candidates, our liquidity and capital resources and other statements identified by words such as “could,” “expects,” “intends,” “may,” “plans,” “potential,” “should,” “will,” “would,” or similar expressions and the negatives of those terms. Forward looking statements are not promises or guarantees of future performance, and are subject to a variety of risks and uncertainties, many of which are beyond our control, and which could cause actual results to differ materially from those contemplated in such forward-looking statements. These factors include risks related to our limited operating history, our ability to obtain necessary funding, our ability to generate positive clinical trial results for our product candidates and other risks inherent in clinical development, the timing and scope of regulatory approvals, changes in laws and regulations to which we are subject, competitive pressures, our ability to identify additional product candidates, risks relating to business interruptions resulting from the coronavirus (COVID-19) pandemic, and other risks set forth under the heading “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2022 and in our subsequent filings with the Securities and Exchange Commission. Our actual results could differ materially from the results described in or implied by such forward looking statements. Forward-looking statements speak only as of the date hereof, and, except as required by law, we undertake no obligation to update or revise these forward-looking statements.

 

Karuna Therapeutics, Inc. Unaudited Consolidated Statements of Operations (in thousands, except share and per share data)
	Three Months Ended
	March 31,
	2023			2022
License and other revenue	$	654		$	—
Operating expenses:
Research and development		85,467			43,806
General and administrative		24,253			14,788
Total operating expenses		109,720			58,594
Loss from operations		(109,066	)		(58,594	)
Other income, net:
Interest income		11,345			237
Sublease income		147			139
Total other income, net		11,492			376
Net loss before income taxes		(97,574	)		(58,218	)
Income tax provision		—			—
Net loss attributable to common stockholders	$	(97,574	)	$	(58,218	)
Net loss per share, basic and diluted	$	(2.80	)	$	(1.95	)
Weighted average common shares outstanding used in computing net loss per share, basic and diluted		34,800,643			29,805,961

 

Karuna Therapeutics, Inc. Unaudited Consolidated Balance Sheet Data (in thousands)
		March 31, 2023				December 31, 2022
Cash, cash equivalents and investments		$	1,474,454			$	1,124,044
Working capital			1,482,522				1,120,823
Total assets			1,516,168				1,163,334
Total stockholders’ equity		$	1,488,135			$	1,126,238

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230504005451/en/

Investors:

Alexis Smith

+1 (518) 338-8990

[email protected]

Media:

Bob Josefsberg

+1 (646) 734-3584

[email protected]

KEYWORDS: Massachusetts United States North America

INDUSTRY KEYWORDS: Research Mental Health Neurology Clinical Trials Health Insurance Biotechnology General Health Pharmaceutical Health Science

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Bluegreen Vacations Reports Financial Results for First Quarter 2023

BOCA RATON, Fla.–(BUSINESS WIRE)–
Bluegreen Vacations Holding Corporation (NYSE: BVH) (OTCQX: BVHBB) (the “Company” or “Bluegreen”) reported today its financial results for the quarter ended March 31, 2023.

Key Highlights as of and for the Quarter Ended March 31, 2023:

• Net income attributable to shareholders decreased 28% to $11.5 million from $16.0 million in the prior year quarter.

• Diluted Earnings Per Share (“EPS”) decreased 7% to $0.71 from $0.76 in the prior year quarter.

• Total revenue increased 13% to $219.1 million from $195.1 million in the prior year quarter.

• System-wide sales of vacation ownership interests (“VOIs”) increased 10% to $166.9 million from $151.5 million in the prior year quarter.⁽¹⁾
• Number of guest tours increased 6% to 51,749 from 48,861 in the prior year quarter.

• Vacation packages sold were 40,780 compared to 41,990 in the prior year quarter.

• Vacation packages outstanding of 166,597 as of March 31, 2023, compared to 165,240 as of December 31, 2022, and 200,627 outstanding as of March 31, 2022.

• Adjusted EBITDA attributable to shareholders decreased 3% to $30.1 million from $31.1 million in the prior year quarter.⁽²⁾
• Free cash flow was an outflow of $27.7 million in the first quarter compared to an inflow of $24.6 million in the first quarter of 2022, primarily as a result of an increase in VOI notes receivable originations and timing of changes in working capital.⁽³⁾
• In April 2023, Bluegreen/Big Cedar Vacations LLC, a joint venture between the Company and Bass Pro Shops, acquired Branson Cedars Resort, an 80-acre property adjacent to the joint venture’s Wilderness Club at Big Cedar Resort. The acquisition marks the fourth resort the Company has added to its portfolio within the last six months.

(1)	See appendix for reconciliation of system-wides sales of VOIs to gross sales of VOIs for each respective period.
(2)	See appendix for reconciliation of Adjusted EBITDA attributable to shareholders to net income attributable to shareholders for each respective period.
(3)	See appendix for reconciliation of free cash flow to net cash provided by operating activities.

Alan B. Levan, Chairman and Chief Executive Officer of Bluegreen Vacations Holding Corporation, commented, “We are pleased that the Bluegreen Renewal is working as anticipated – sales volume is up, sales volume per guest is up, guest tours are up and we are exceeding our internal budget on operating margin. The fact that our EPS and Adjusted EBITDA are down is a function of several identifiable items which we budgeted for in November and believe will resolve in the coming months. These include our purchases of additional inventory which have short-term carrying costs to the Company, start-up operations related to the opening of a new sales center, resorts temporarily closed as a consequence of weather and other events, and increased staffing in anticipation of future higher sales volume. Additionally, during the first quarter of 2023 a higher proportion of VOI sales were financed by us, resulting in a higher provision for loan losses as a percentage gross sales of VOIs.”

“In July 2022, we acquired a resort in Vail, Colorado. In January 2023, we commenced VOI sales operations at our newly acquired Bayside Resort & Spa in Panama City Beach, Florida. In February 2023, we extended our relationship with NASCAR^® for an additional six years as the Official Vacation Ownership Provider of NASCAR^®, providing exclusive experiences for our owners and guests and opportunities to market the Bluegreen Vacation Club. Also, in February 2023, we broke ground on the Mill Springs Lodge resort in Pigeon Forge, Tennessee, with a planned 67 accommodations and amenities for our owners and guests to start enjoying more time in the Smoky Mountains in 2024. The expansion continued in the second quarter, with the recently announced acquisition by Bluegreen/Big Cedar Vacations LLC, our joint venture with Bass Pro Shops, of Branson Cedars Resort in Branson, Missouri. While we expect that these expansion initiatives will in the future produce higher revenues and earnings, in the short-term the increased inventory carry cost and start-up operations have put pressure on our operating margins during the first quarter.”

“During 2022, we announced that several of our resorts were impacted by weather or other catastrophic issues forcing partial or entire closure of the resort and the movement of staff, owners and guests to other resorts. A number of these resorts were still impacted and not fully open during the first quarter of 2023. The staff resources to rehabilitate these resorts have been a Herculean effort. Some are still impacted, but we expect all resorts to be fully operational during the coming months of 2023.”

“Turning to our first quarter results, our sales team again generated a first quarter record $166.9 million of system-wide sales of VOIs, which was a 10% increase over the prior year quarter. The increase reflected both an increase in our sales efficiency, as demonstrated by the 4% increase in our sales volume per guest, and a 6% increase in guest tours over the prior year quarter. Had it not been for the out of service units in certain Florida properties as a consequence of hurricanes in 2022, we believe our efficiencies could have been even higher and we expect to increase efficiency as more of these units return to our system in the coming months.”

“Our sales of VOIs are driven by the success of our marketing programs, and Bluegreen’s marketing to new customers generally begins with the sale of a vacation package to a prospect. During the first quarter of 2023, we sold 40,780 vacation packages, a decrease from the 41,990 we sold in the first quarter of 2022. We consider this quite a positive achievement considering we closed or went virtual on 52 marketing locations on January 1, 2023. During the first quarter, we continued to invest in and expand our marketing and sales operations to ensure we are properly staffed for the volume we expect to see during the summer travel season. This spend in the short term resulted in higher sales and marketing expenses in the first quarter and while our selling and marketing cost as a percentage of system-wide sales of VOIs was consistent this quarter with the first quarter of 2022, we believe profitability will increase in the future.”

“As of March 31, 2023, our notes receivable portfolio again hit an all-time record high balance of $789 million, up 27% from March 31, 2022. We are focused on growing this portfolio and enjoying increased interest income over time. While this increase in notes receivable is anticipated to increase earnings overtime, the higher proportion of VOI sales financed by us has and will result in a higher provision for loan losses, which negatively impacted our first quarter 2023 results.”

“Not to be overlooked, our Resort Management and Club Operations segment grew its Adjusted EBITDA by 10% in the first quarter, to $22.6 million from $20.6 million in the first quarter of 2022, driven by a 12% increase in revenue. We believe that the results of this segment are important to our continued goal of generating recurring free cash flow and earnings.”

“I’m also pleased that we were able to increase our quarterly dividend to our shareholders by over 33%, demonstrating our goal of improving shareholder returns over time.”

“Overall, the demand for vacations by Bluegreen Vacation Club owners has been and remains strong and we believe our core strategy of primarily offering a ‘drive-to’ network of resorts will continue to serve as a growth driver. From a balance sheet perspective, we believe that we are well positioned to help us navigate uncertain economic conditions with approximately $166.7 million of unrestricted cash on hand and $389.3 million of conditional availability under our lines of credit and receivable purchase facilities as of March 31, 2023. We also believe we have a level of protection from rising interest rates as 38% of our outstanding debt is at fixed interest rates. We intend to maintain what we believe to be a healthy balance sheet, while continuing our focus on growth and profitability over the long term,” Mr. Levan concluded.

Financial Results (dollars in millions, except per guest and per transaction amounts)
	Three Months Ended March 31,
	2023			2022			Q1 2023 vs Q1 2022 % Change
Total revenue	$	219.1		$	195.1		12		%
Income before non-controlling interest and provision for income taxes	$	19.9		$	25.4		(22	)	%
Adjusted EBITDA Attributable to Shareholders (1)	$	30.1		$	31.1		(3	)	%

Adjusted EBITDA Attributable to Shareholders was $30.1 million for the quarter ended March 31, 2023, including $34.7 million generated by the Sales of VOIs and Financing Segment and $22.6 million produced by the Resort Operations and Club Management segment, partially offset by $23.3 million of corporate overhead and other expenses and $4.0 million of Adjusted EBITDA attributable to a third-party non-controlling interest in Bluegreen/Big Cedar Vacations LLC. Please see the discussion of Segment Results below for further information.

Sales of VOIs and Financing Segment (dollars in millions, except per guest and per transaction amounts)
	Three Months Ended March 31,
	2023				2022				Q1 2023 vs Q1 2022 % Change
System-wide sales of VOIs	$	166.9			$	151.5			10		%
Segment Adjusted EBITDA	$	34.7			$	35.7			(3	)	%
Provision for loan losses		17	%			14	%		300		bp
Cost of VOIs sold		12	%			12	%		—		bp
Financing revenue, net of financing expense	$	21.1			$	18.7			13		%

Key Data Regarding Bluegreen’s System-wide sales of VOIs and Gross Profit
	Three Months Ended March 31,
	2023				2022				Q1 2023 vs Q1 2022 % Change
System-wide sales of VOIs	$	166.9			$	151.5			10	%
Number of total guest tours		51,749				48,861			6	%
Average sales price per transaction	$	21,916			$	20,226			8	%
Sales to tour conversion ratio		15	%			15	%		—	bp
Sales volume per guest (“VPG”)	$	3,225			$	3,110			4	%
Selling and marketing expenses, as a % of system-wide sales of VOIs		55	%			55	%		—	bp
Provision for loan losses		17	%			14	%		300	bp
Cost of VOIs sold		12	%			12	%		—	bp

System-wide sales of VOIs increased 10% to $166.9 million during the three months ended March 31, 2023 from $151.5 million for the three months ended March 31, 2022. The number of guest tours was 6% higher while sales volume per guest, or VPG, was 4% higher in the first quarter of 2023 as compared to the first quarter of 2022. The VPG performance in the first quarter of 2023 was driven by an 8% increase in average sales price per transaction, partially offset by a 70 basis-point decrease in the sale-to-tour conversion rate as we continued to focus on larger transaction sizes.

Fee-based Sales Commission Revenue

VOI sales of third-party inventory, for which we earn a commission, represented 11% of System-wide Sales of VOIs during the first quarter of 2023. Fee-based sales commission revenue on such sales was $11.7 million during the first quarter of 2023, which represented a commission rate of approximately 65%.

VOI sales of third-party inventory, for which we earn a commission, are expected to be between 8% and 12% of system-wide sales of VOIs for the remainder of 2023.

Provision for Loan Losses

The provision for loan losses as a percentage of gross sales of VOIs was approximately 17% during the first quarter of 2023 and 14% during the first quarter of 2022. The increase in the provision for loan losses as a percentage of gross sales of VOIs during the first quarter of 2023 is primarily a result of a higher proportion of VOI sales that were financed by us, as we actively seek to grow our VOI notes receivable portfolio in an effort to generate additional interest income.

The provision for loan losses is expected to be between 16% and 18% of gross sales of VOIs for the remainder of 2023.

Cost of VOIs Sold

Cost of VOIs sold represented 12% of sales of VOIs in the first quarters of 2023 and 2022.

Cost of VOIs sold is expected to be between 11% and 13% of sales of VOIs for the remainder of 2023.

Financing Revenue, net of Financing Expense

Interest income on VOI notes receivable increased 26% to $28.0 million in the first quarter of 2023 compared to $22.1 million in the first quarter of 2022 reflecting a higher balance of VOI notes receivable due to continued VOI sales growth and our efforts to increase the amount of VOI sales that we finance. Interest expense on receivable-backed notes payable increased 100% to $6.8 million in the first quarter of 2023 compared to $3.4 million in the first quarter of 2022, due to higher outstanding receivable-backed notes payable and an increased weighted-average cost of borrowing.

Selling and Marketing Expenses

	Three Months Ended March 31,
	2023				2022				Q1 2023 vs Q1 2022 % Change
Selling and marketing expenses, as a % of system-wide sales of VOIs		55	%			55	%		—		bp
Percentage of sales of VOIs to new customers		39	%			43	%		(400	)	bp
Number of Bass Pro and Cabela’s marketing locations (1)		129				128			1		%
Number of total guest tours		51,749				48,861			6		%
Number of vacation packages sold		40,780				41,990			(3	)	%
Number of vacation packages outstanding, end of the period (2)		166,597				200,627			(17	)	%

(1)	As of January 1, 2023, 23 of our Cabela’s marketing locations were converted to unmanned, virtual kiosks.
(2)	Excludes vacation packages sold to customers more than one year prior to the period presented and vacation packages sold to customers who had already toured and purchased.

Selling and marketing expenses increased 10% in the first quarter of 2023 compared to the first quarter of 2022 consistent with the increase in system-wide sales of VOIs and were approximately 55% as a percentage of sales in both periods. Sales to existing owners, which are generally more profitable than sales to new customers, increased from 57% of system-wide sales in the first quarter of 2022 to 61% in the first quarter of 2023. The efficiency generated through a higher owner mix was offset by costs associated with expanding our sales and marketing operations, including the opening of a sales office and commencement of VOI sales at Bluegreen’s Bayside Resort & Spa in Panama City Beach, Florida.

As previously disclosed, Bluegreen transitioned its kiosks at certain Cabela’s stores to an unmanned, virtual format as of January 1, 2023 and exited certain kiosks at malls. Even with this reduction of locations, Bluegreen’s vacation marketing programs generated 40,780 vacation packages during the first quarter of 2023. This reflects a decrease of approximately 3% in vacation package sales as compared to the first quarter of 2022. The active pipeline of vacation packages decreased to 166,597 at March 31, 2023 from 200,627 at March 31, 2022, based on vacation packages used or expired net of new vacation package sales. While there is no assurance that this will continue to be the case, historically, approximately 40%-42% of vacation packages resulted in guest tours at one of Bluegreen’s resorts with a sales center within twelve months of purchase. In addition to this active pipeline, Bluegreen also has a pipeline of approximately 15,800 vacation packages held by customers who already toured and purchased a VOI who have indicated they would tour again.

Selling and marketing expenses are expected to be between 53% and 55% as a percentage of system-wide sales for the remainder of 2023.

General & Administrative Expenses from Sales & Marketing Operations

General and administrative expenses representing expenses directly attributable to sales and marketing operations increased 15% to $11.5 million during the first quarter of 2023 from $10.0 million during the first quarter of 2022. As a percentage of system-wide sales of VOIs, general and administrative expenses attributable to sales and marketing operations were 7% in both the first quarter of 2023 and the first quarter of 2022.

General and administrative expenses representing expenses directly attributable to sales and marketing operations as a percentage of sales are expected to be between 6% and 8% as a percentage of system-wide sales for the remainder of 2023.

Resort Operations and Club Management Segment (dollars in millions)
	Three Months Ended March 31,
	2023			2022			Q1 2023 vs Q1 2022 % Change
Resort operations and club management revenue	$	51.6		$	46.2		12	%
Segment adjusted EBITDA	$	22.6		$	20.6		10	%
Resorts managed		50			49		2	%

The increases in the first quarter 2023 in Resort operations and club management revenue and Adjusted EBITDA primarily reflect an increase in management fees, higher reimbursed HOA resort operating costs and an additional resort management contract, partially offset by higher labor costs of providing such services.

Corporate Overhead, Administrative Expenses and Interest Expense

Corporate General and Administrative Expenses

General and administrative expenses increased 6% to $26.7 million during the first quarter of 2023 from $25.3 million during the first quarter of 2022. The increase during the 2023 quarter as compared to the 2022 quarter was primarily due to higher expenses associated with higher legal fees, insurance costs and information technology costs.

Interest Expense

Interest expense not related to receivable-backed debt was $9.6 million and $4.4 million during the first quarters of 2023 and 2022, respectively. These increases were primarily due to an increase in outstanding debt and a higher weighted-average cost of borrowing due to increased interest rates in the 2023 period.

Additional Information

For more complete and detailed information regarding the Company and its financial results, please see the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 13, 2023, and its Quarterly Report on Form 10- Q for the three months ended March 31, 2023, which is expected to be filed with the SEC on or about May 4, 2023,and will be available on the SEC’s website, https://www.sec.gov, and on the Company’s website, www.BVHCorp.com.

Non-GAAP Financial Measures

The Company refers to certain non-GAAP financial measures in this press release, including EBITDA, Adjusted EBITDA, System-wide Sales of VOIs, and Free Cash Flow. Please see the supplemental tables herein for how these terms are defined and for reconciliations of such measures to the most comparable GAAP financial measures.

About Bluegreen Vacations:

Bluegreen Vacations Holding Corporation (NYSE: BVH; OTCQX: BVHBB) is a leading vacation ownership company that markets and sells vacation ownership interests and manages resorts in popular leisure and urban destinations. The Bluegreen Vacation Club is a flexible, points-based, deeded vacation ownership plan with 71 Club and Club Associate Resorts and access to nearly 11,200 other hotels and resorts through partnerships and exchange networks.

For further information, please visit us at:

Bluegreen Vacations Holding Corporation: www.BVHCorp.com

Forward Looking Statements

Certain statements in this press release are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements are based on current expectations of management and can be identified by the use of words such as “believe”, “may”, “could”, “should”, “plans”, “anticipates”, “intends”, “estimates”, “expects”, and other words and phrases of similar import. Forward-looking statements involve risks, uncertainties, and other factors, many of which are beyond our control, that may cause actual results or performance to differ from those set forth or implied in the forward-looking statements. These risks and uncertainties include, without limitation, the risk that the Company is a holding company and, accordingly, will be largely dependent on dividends from Bluegreen to fund its expenses and obligations in future periods, and Bluegreen’s ability to pay dividends will depend on its results and may be limited by the terms of Bluegreen’s indebtedness; risks regarding the amount of shares, if any, which may be repurchased by the Company in the future, the benefits to the Company, if any, of repurchasing shares, the timing of any share repurchases, and the availability of funds for the repurchase of shares; the risk that quarterly dividend payments may not be declared at the current level in the future, on a regular basis as anticipated, or at all; risks relating to Bluegreen’s business, operations, financial results, business strategy and prospects; risks related to general economic conditions, including increasing interest rates, inflationary trends, a potential recession and supply chain issues, and our ability to successfully navigate any adverse condition; competitive conditions; labor market conditions, including costs and shortages of labor, and its impact on Bluegreen’s operations and sales; risks related to changes made to our vacation package programs and their impact on sales, including that the goal of improving the efficiency of Bluegreen’s marketing spend may not result in the benefits anticipated; risks related to our investments in sales and marketing efforts and infrastructure, including their impact on our cash flow and the risk that they may not result in the benefits anticipated; risks related to resort acquisitions and our pursuit of acquisition and development opportunities, including that acquired resorts may not open when planned, the costs and risks of development and renovation activities, including potential construction delays and environmental issues, that we may not be successful in identifying or consummating acquisition or development opportunities in the future, and that acquired or developed resorts may not be successfully operated or result in the benefits anticipated; risks relating to our liquidity and the availability of capital; the risk that our allowance for loan losses may not be adequate and, accordingly, may need to be increased in the future, including if Bluegreen’s default rates increase and exceed expectations; risks related to Bluegreen’s efforts to address the actions of timeshare exit firms and the increase in default rates associated therewith are not successful, or otherwise; risks related to our indebtedness, including the potential for accelerated maturities and debt covenant violations; the impact of public health and general economic conditions, including inflation, on Bluegreen’s consumers, including their income and level of discretionary spending, and on consumer traffic at retail locations; the risk that our core strategy of primarily offering a ‘drive-to’ network of resorts will not continue to serve as a growth driver; the risk that resort operations and club management segment may not continue to produce recurring EBITDA and free cash flow; risks that Bluegreen’s current or future marketing alliances and arrangements, including its marketing arrangements with Bass Pro, NASCAR and the Choice Hotels program, may not be renewed and will expire pursuant to their terms and may not be profitable; the risk that vacation package sales, including those in the pipeline, may not convert to tours and/or VOI sales at anticipated or historical rates; the risk that efforts to reactivate older vacation packages which have not been used may not be successful; the risk that resort occupancies may not continue at current or historical levels or meet expectations; our ability to successfully implement strategic plans and initiatives, generate earnings and long-term growth may not result in increased sales, revenues or efficiencies, or otherwise be successful; risks that construction defects, structural failures or natural disasters at or in proximity to Bluegreen’s resort; risks related to expansion of the resort network in existing and to new locations, including that such expansion may not be successful and may increase the Company’s debt and decrease the Company’s free cash flow; risks related to the mix of sales to new customers and existing owners, including that the level of sales to new customers may not be increased or maintained, or support net owner growth in the future; and the additional risks and uncertainties described in the Company’s filings with the SEC, including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (including the “Risk Factors” section thereof), which was filed on March 13, 2023, and the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2023, which is expected to be filed on May 4, 2023. The Company cautions that the foregoing factors are not exclusive. You should not place undue reliance on any forward-looking statement, which speaks only as of the date made. The Company does not undertake, and specifically disclaims any obligation, to update or supplement any forward-looking statements. In addition, past performance may not be indicative of future results.

BLUEGREEN VACATIONS HOLDING CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
		March 31,				December 31,
		2023				2022
ASSETS
Cash and cash equivalents		$	166,663			$	175,683
Restricted cash ($22,116 and $19,461 in VIEs at March 31, 2023
and December 31, 2022, respectively)			43,835				50,845
Notes receivable			789,114				763,801
Less: Allowance for loan losses			(214,796	)			(211,311	)
Notes receivable, net ($373,270 and $354,403 in VIEs
at March 31, 2023 and December 31, 2022, respectively)			574,318				552,490
Vacation ownership interest (“VOI”) inventory			380,817				389,864
Property and equipment, net			86,228				85,915
Intangible assets, net			61,293				61,293
Operating lease assets			21,717				22,963
Prepaid expenses			34,686				23,833
Other assets			31,586				35,499
Total assets		$	1,401,143			$	1,398,385
LIABILITIES AND EQUITY
Liabilities
Accounts payable		$	15,477			$	21,389
Deferred income			15,537				15,675
Accrued liabilities and other			87,230				110,048
Receivable-backed notes payable – recourse			20,082				20,841
Receivable-backed notes payable – non-recourse (in VIEs)			468,375				440,781
Note payable to BBX Capital, Inc.			50,000				50,000
Note payable and other borrowings			207,547				218,738
Junior subordinated debentures			136,296				136,011
Operating lease liabilities			26,354				27,716
Deferred income taxes			116,806				113,193
Total liabilities			1,143,704				1,154,392
Commitments and Contingencies
Equity
Preferred stock of $0.01 par value; authorized 10,000,000 shares			—				—
Class A Common Stock of $0.01 par value; authorized 30,000,000 shares;
issued and outstanding 12,204,198 in 2023 and 12,165,825 in 2022			122				122
Class B Common Stock of $0.01 par value; authorized 4,000,000 shares;
issued and outstanding 3,664,117 in 2023 and 2022			37				37
Additional paid-in capital			48,270				46,821
Accumulated earnings			132,771				124,680
Total Bluegreen Vacations Holding Corporation equity			181,200				171,660
Non-controlling interest			76,239				72,333
Total equity			257,439				243,993
Total liabilities and equity		$	1,401,143			$	1,398,385

BLUEGREEN VACATIONS HOLDING CORPORATION CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (In thousands, except share data)
		For the Three Months Ended
		March 31,
		2023				2022
Revenue:
Gross sales of VOIs		$	148,859			$	115,607
Provision for loan losses			(25,246	)			(16,579	)
Sales of VOIs			123,613				99,028
Fee-based sales commission revenue			11,691				24,084
Other fee-based services revenue			33,301				31,207
Cost reimbursements			21,369				18,064
Interest income			28,834				22,198
Other income, net			265				548
Total revenues			219,073				195,129
Costs and Expenses:
Cost of VOIs sold			15,331				11,841
Cost of other fee-based services			14,582				12,765
Cost reimbursements			21,369				18,064
Interest expense			16,469				7,759
Selling, general and administrative expenses			131,438				119,302
Total costs and expenses			199,189				169,731
Income before income taxes			19,884				25,398
Provision for income taxes			(4,479	)			(6,190	)
Net income			15,405				19,208
Less: Income attributable to non-controlling interests			3,906				3,220
Net income attributable to shareholders		$	11,499			$	15,988
Comprehensive income attributable to shareholders		$	11,499			$	15,988
Basic earnings per share (1)		$	0.73			$	0.77
Diluted earnings per share (1)		$	0.71			$	0.76
Basic weighted average number of common shares outstanding			15,860				20,778
Diluted weighted average number of common and common equivalent shares outstanding			16,246				20,971
Cash dividends declared per Class A and B common shares		$	0.20			$	—

(1)	Basic and Diluted EPS are calculated the same for both Class A and B common shares.

BLUEGREEN VACATIONS HOLDING CORPORATION ADJUSTED EBITDA ATTRIBUTABLE TO SHAREHOLDERS RECONCILIATION
	For the Three Months Ended March 31,
	2023				2022
(in thousands)
Net income attributable to shareholders	$	11,499			15,988
Net income attributable to the non-controlling interest in Bluegreen/Big Cedar Vacations		3,906			3,220
Net Income		15,405			19,208
Add: Depreciation and amortization		3,972			3,922
Less: Interest income (other than interest earned on
VOI notes receivable)		(872	)		(62	)
Add: Interest expense – corporate and other		9,628			4,364
Add: Provision for income taxes		4,479			6,190
EBITDA		32,612			33,622
Add: Share-based compensation expense		1,457			746
Gain on assets held for sale		(19	)		(44	)
Adjusted EBITDA		34,050			34,324
Adjusted EBITDA attributable to the non-controlling interest		(3,963	)		(3,269	)
Adjusted EBITDA attributable to shareholders	$	30,087			31,055

The Company defines EBITDA as earnings, or net income, before taking into account income tax, interest income (excluding interest earned on VOI notes receivable), interest expense (excluding interest expense incurred on debt secured by VOI notes receivable), and depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA, adjusted to exclude amounts of loss (gain) on assets held for sale, share-based compensation expense, and items that the Company believes are not representative of ongoing operating results. Adjusted EBITDA Attributable to Shareholders is Adjusted EBITDA excluding amounts attributable to the non-controlling interest in Bluegreen/Big Cedar Vacations (in which Bluegreen owns a 51% interest). For purposes of the calculation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders, no adjustments were made for interest income earned on VOI notes receivable or the interest expense incurred on debt that is secured by such notes receivable because they are both considered to be part of the ordinary operations of the Company’s business.

The Company considers EBITDA, Adjusted EBITDA, and Adjusted EBITDA Attributable to Shareholders to be indicators of operating performance, and they are used by the Company to measure its ability to service debt, fund capital expenditures and expand its business. EBITDA and Adjusted EBITDA are also used by companies, lenders, investors and others because they exclude certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company’s capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders also exclude depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders are not recognized terms under GAAP and should not be considered as an alternative to net income or any other measure of financial performance or liquidity, including cash flow, derived in accordance with GAAP, or to any other method or analyzing results as reported under GAAP. The limitations of using EBITDA, Adjusted EBITDA or Adjusted EBITDA Attributable to Shareholders as an analytical tool include, without limitation, that EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders do not reflect (i) changes in, or cash requirements for, working capital needs; (ii) interest expense, or the cash requirements necessary to service interest or principal payments on indebtedness (other than as noted above); (iii) tax expense or the cash requirements to pay taxes; (iv) historical cash expenditures or future requirements for capital expenditures or contractual commitments; or (v) the effect on earnings or changes resulting from matters that the Company does not believe to be indicative of future operations or performance. Further, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often have to be replaced in the future, and EBITDA, Adjusted EBITDA and Adjusted EBITDA Attributable to Shareholders do not reflect any cash that may be required for such replacements. In addition, the Company’s definition of Adjusted EBITDA or Adjusted EBITDA Attributable to Shareholders may not be comparable to definitions of Adjusted EBITDA, Adjusted EBITDA Attributable to Shareholders or other similarly titled measures used by other companies.

BLUEGREEN VACATIONS HOLDING CORPORATION SYSTEM-WIDE SALES OF VOIs RECONCILIATION (1)
	For the Three Months Ended March 31,
(in thousands)	2023			2022
Gross sales of VOIs	$	148,859		$	115,607
Add: Fee-Based sales		18,087			35,937
System-wide sales of VOIs	$	166,946		$	151,544

(1)

System-wide Sales of VOIs is a non-GAAP measure and represents all sales of VOIs, whether owned by Bluegreen or a third party immediately prior to the sale. Sales of VOIs owned by third parties are transacted as sales of VOIs in the Bluegreen Vacation Club through the same selling and marketing process Bluegreen uses to sell its VOI inventory. The Company considers system-wide sales of VOIs to be an important operating measure because it reflects all sales of VOIs by its sales and marketing operations without regard to whether Bluegreen or a third party owned such VOI inventory at the time of sale. System-wide sales of VOIs should not be considered as an alternative to sales of VOIs or any other measure of financial performance derived in accordance with GAAP or to any other method of analyzing results as reported under GAAP.

BLUEGREEN VACATIONS HOLDING CORPORATION FREE CASH FLOW RECONCILIATION (1)
	For the Three Months Ended March 31,
(in thousands)	2023				2022
Net cash (used in) provided by operating activities	$	(23,748	)		$	29,492
Purchases of property and equipment		(3,924	)			(4,895	)
Free Cash Flow	$	(27,672	)		$	24,597

(1)

Free cash flow is a non-GAAP measure defined as cash provided by operating activities less capital expenditures for property and equipment. The Company focuses on the generation of free cash flow and considers free cash flow to be a useful supplemental measure of its ability to generate cash flow from operations and is a supplemental measure of liquidity. Free cash flow should not be considered as an alternative to cash flow from operating activities as a measure of liquidity. The Company’s computation of free cash flow may differ from the methodology used by other companies. Investors are cautioned that items excluded from free cash flow are a significant component in understanding and assessing the Company’s financial performance.

BLUEGREEN VACATIONS HOLDING CORPORATION SALES OF VOIs AND FINANCING SEGMENT- ADJUSTED EBITDA
		For the Three Months Ended March 31,
		2023							2022
		Amount				% of System- wide sales of VOIs (5)			Amount				% of System- wide sales of VOIs (5)
(in thousands)
Bluegreen owned VOI sales(1)		$	148,859			89			$	115,607			76
Fee-Based VOI sales			18,087			11				35,937			24
System-wide sales of VOIs			166,946			100				151,544			100
Less: Fee-Based sales			(18,087	)		(11	)			(35,937	)		(24	)
Gross sales of VOIs			148,859			89				115,607			76
Provision for loan losses (2)			(25,246	)		(17	)			(16,579	)		(14	)
Sales of VOIs			123,613			74				99,028			65
Cost of VOIs sold (3)			(15,331	)		(12	)			(11,841	)		(12	)
Gross profit (3)			108,282			88				87,187			88
Fee-Based sales commission revenue (4)			11,691			65				24,084			67
Financing revenue, net of financing expense			21,121			13				18,741			12
Other expense			(699	)		0				(152	)		0
Other fee-based services, title operations and other, net			1,285			1				2,130			1
Net carrying cost of VOI inventory			(4,981	)		(3	)			(4,056	)		(3	)
Selling and marketing expenses			(92,527	)		(55	)			(83,889	)		(55	)
General and administrative expenses – sales and marketing			(11,499	)		(7	)			(9,961	)		(7	)
Operating profit – sales of VOIs and financing			32,673			20	%			34,084			22	%
Add: Depreciation and amortization			2,035							1,649
Add: Loss on sale of assets			19							—
Adjusted EBITDA – sales of VOIs and financing		$	34,727						$	35,733

(1)	Bluegreen owned sales represent sales of VOIs acquired or developed by Bluegreen.
(2)	Percentages for provision for loan losses are calculated as a percentage of gross sales of VOIs, which excludes Fee-Based sales (and not as a percentage of system-wide sales of VOIs).
(3)	Percentages for costs of VOIs sold and gross profit are calculated as a percentage of sales of VOIs (and not as a percentage of system-wide sales of VOIs).
(4)	Percentages for Fee-Based sales commission revenue are calculated as a percentage of Fee-Based sales (and not as a percentage of system-wide sales of VOIs).
(5)	Represents the applicable line item, calculated as a percentage of system-wide sales of VOIs unless otherwise indicated in the above footnotes.

 

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Bluegreen Vacations Holding Corporation Contact Info

Investor Relations: Leo Hinkley, Managing Director, Investor Relations Officer

Telephone: 954-399-7193

Email: [email protected]

KEYWORDS: Florida United States North America

INDUSTRY KEYWORDS: Maritime Transport Restaurant/Bar Other Travel Lodging Vacation Destinations Retail Cruise Travel

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