BOCA RATON, FL-Sales in both the resorts and communities divisions of Bluegreen Corp. rose during first quarter. But the mandatory implementation of a change in the rules for several aspects of timeshare accounting reduced first-quarter resort sales by a net of $6.4 million.
"As expected, the adoption of the new accounting regulations impacted our results for the first quarter," said George F. Donovan, president and CEO, during a conference call. The new rules require "certain timeshare sales to be deferred," he said, "which shifted recognition of [some] timeshare profits from first quarter to second quarter."
Specifically, under the new accounting practice, $24.7 million in resort sales and $14.2 million in resort profits were deferred. They will be recognized in future periods. The rule change also resulted in a one-time, non-cash charge of $4.5 million related to the company's resort sales incentives and promotions.
Bluegreen's total first-quarter sales were $119.4 million, an increase of 14.8% over the same quarter a year ago. Resort sales accounted for $71.7 million of the total and represented a 9.3%-increase over first-quarter 2005 resort sales. Community sales were $47.6 million, an increase of 24.1% compared with the same quarter of 2005.
Of the communities division's two first-quarter acquisitions of land in Texas, Donovan said he expects to begin home sales by fourth quarter this year. He anticipates a $150-million sellout over eight years in one location and a $168-million sellout over seven years in the other.
He also said that although Bluegreen has no properties in Las Vegas, "that's definitely a mega market we're interested in." It will enter "most likely," he said, "by buying a piece of dirt."
Regarding any impact of gas prices on the resorts division, he said, "there's no indication at this time of any deterioration in occupancy. It's possible that timeshare owners will look at resorts closer to home, but it's too early to tell." He also said he is not aware of fuel rebates for resort tours, but added, "it would be worth consideration as an incentive."
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