Losses narrow at Woodbridge, reserve split proposed
Woodbridge Holdings Corp., formerly known as Levitt Corp., narrowed its loss in the second quarter, but it is battling to stay on the New York Stock Exchange.
On Monday, it received a notice from the NYSE that its closing share price has averaged below $1 for 30 consecutive trading days. Woodbridge said it would seek to cure the deficiency, which could otherwise lead to delisting from the exchange.
The Fort Lauderdale-based company said it intends to seek a reverse stock split in the third or fourth quarter that could boost its share price to meet listing requirements. The move would combine a certain number of Woodbridge’s Class A common stock and Class B common stock into one share of Class A common stock and Class B common stock, respectively.
Woodbridge, which owns stakes in time-share operator Bluegreen Corp. and developer Core Communities, lost $8.9 million, or 9 cents per share, in the second quarter. That’s an improvement from the $58.1 million loss it suffered in the second quarter of 2007 – before its homebuilding subsidiary Levitt and Sons declared bankruptcy and was cut off from its parent.
Woodbridge (NYSE: WDG) recorded just $3.2 million in revenue in the second quarter, a steep dive from its $127.1 million in sales during the same period of last year. Real estate sales went from comprising nearly 99 percent of the company’s revenue a year ago to about 75 percent in the most recent quarter.
Woodbridge made it up by cutting back on expenses.
On July 21, Bluegreen announced that it issued a letter of intent to sell all of its outstanding common stock for $15 per share. Woodbridge owned 9.5 million shares – or 31 percent of Bluegreen outstanding common stock – on June 30. It assigned a $117.4 million book value to its investment in Bluegreen, which would amount to $12.36 per share.
Woodbridge owns an equity stake in Office Depot, of Delray Beach. It sold nearly 1.6 million of those shares for an average price of $12.08 in June easy fast cash. Woodbridge gained $1.2 million from that transaction. It still owned 1.4 million Office Depot shares on June 30.
The company noted that it intends to make acquisitions and investments both within and outside the real estate industry.
“We are also exploring strategic initiatives that have the potential of enhancing liquidity and shareholders’ equity,” Woodbridge stated in its filing. “These initiatives include the consideration of alternatives to monetize a portion of our interests in core assets, including through possible joint ventures or other strategic relationships.”
Woodbridge also noted that it could be responsible for up to $12 million, plus costs and expenses, of the $33.3 million in surety bonds that Levitt and Sons had entered into. The company has already logged $1.1 million in accrual for this reason.
“It is unclear, given the uncertainty involved in the Chapter 11 cases, whether and to what extent the remaining outstanding surety bonds of Levitt and Sons will be drawn and the extent to which Woodbridge may be responsible for additional amounts beyond this accrual,” Woodbridge stated in its filing. “It is unlikely that Woodbridge would have the ability to receive any repayment, assets or other consideration as recovery of any amounts it is required to pay.”
Shares of Woodbridge traded down 6 cents, or 5.8 percent, to 96 cents on Tuesday morning. The 52-week high was $4.46 on Aug. 13 last year. The 52-week low was 60 cents on July 15.