Wyndham International Reports Third Quarter 2004 Results
DALLAS - Nov. 9, 2004--Wyndham International (AMEX:WBR):
Results Summary:
-
EBITDA, as adjusted, for the quarter was $43.7 million, consistent with
previous guidance adjusted for asset sales, and notwithstanding lost business
sustained from four hurricanes that impacted Florida and the Caribbean
during the quarter.
-
Wyndham reported a net loss of $15.6 million and a net loss of $0.35 per
share.
-
RevPAR for comparable owned and leased properties increased 3.7 percent
compared to last year, meeting Wyndham's previous guidance.
-
Wyndham.com continued to exceed third-party Internet sites combined and
is on track to achieve the Company's 2004 goal of $100 million in total
bookings.
-
Wyndham sold six properties for combined gross proceeds of $249.5 million.
-
Total debt was reduced by $250.0 million during the quarter.
Wyndham International, Inc. today reported actual earnings before interest,
taxes, depreciation and amortization (EBITDA), as adjusted, of $43.7 million
for the three months ended Sept. 30, 2004, compared to $45.9 million for
the same quarter last year. Wyndham reported a net loss for the quarter
of $15.6 million versus an $89.1 million net loss for the same period in
2003. After the effect of the Company's preferred dividend, this resulted
in a net loss of $0.35 per share on a fully diluted basis versus a net
loss of $0.76 per share in the third quarter 2003.
"Wyndham experienced positive business performance in key markets throughout
the U.S., including Boston, Washington, D.C., Chicago and Dallas. Despite
the impact of the four hurricanes that affected the Caribbean, Florida
and New Orleans, Wyndham met its earnings guidance due to the Wyndham team's
ability to quickly respond to the negative impact and implement effective
revenue driving strategies," stated Fred J. Kleisner, Wyndham's chairman,
president and chief executive officer.
Wyndham-branded owned and leased properties reported a third quarter
market share penetration index of 105.8. Including non-proprietary assets,
total Company operated properties posted a market share penetration index
of 104.0. On a system-wide basis year over year, Wyndham posted strong
RevPar increases for its owned, leased, and managed properties. Brand breakdown
is as follows:
-
Wyndham Hotels & Resorts: $84.27 or a 6.4 percent increase
-
Wyndham Luxury Resorts: $153.02 or a 7.4 percent increase
-
Wyndham Garden Hotels: $80.37 or an 8.2 percent increase
Total Company comparable owned and leased assets, including non-proprietary
assets, posted RevPAR of $93.69 or an increase of 3.7 percent, consistent
with the Company's guidance despite the impact of the hurricanes.
Dispositions/Brand Growth:
During the quarter, Wyndham sold six properties for gross proceeds of
$249.5 million. All net proceeds from the sales were used to pay down debt.
The six properties include the Holiday Inn Westlake; Hilton Parsippany;
Crowne Plaza Ravinia; Tremont Boston - A Wyndham Historic Hotel; Wyndham
Wind Watch; and Bonaventure Resort & Spa, which will be re-flagged
the Wyndham Resort & Golden Door Spa upon completion of a total property
redevelopment. Wyndham will manage the resort.
Subsequent to the quarter's end, Wyndham closed the sale of ten additional
properties for gross proceeds of $93.9 million. Nine of the properties
will remain under Wyndham's management pursuant to new management agreements,
including the Holiday Inn Aristocrat; Holiday Inn San Angelo; Radisson
Dallas; Wyndham Roanoke Airport; Union Station - A Wyndham Historic Hotel;
Tutwiler - A Wyndham Historic Hotel; Wyndham Peachtree Hotel & Conference
Center; Wyndham Colorado Springs; and Wyndham Miami Airport. The sale of
the tenth property, the Wyndham Vinings, closed on November 1, and will
remain in the Wyndham brand portfolio pursuant to a long-term franchise
agreement.
During the quarter, Wyndham announced three new franchise agreements,
including the Wyndham Cap Tremblant Resort located near Montreal (converting
May 2005); the Viva Wyndham Playa Dorado in the Dominican Republic (opening
January 2005); and the Wyndham Reading, Pa. (opened in September). Wyndham
also acquired the lease for the Wyndham Hotel in Manhattan. The Company
now operates the hotel and has complete usage rights of its proprietary
brand name to expand its distribution in New York City through new development
opportunities.
Subsequent to the quarter's end, Wyndham signed two additional agreements
including the Viva Wyndham Samana in the Dominican Republic (opening December
2004) and the Wyndham O'Hare Airport (converted November 1).
Brand Distribution:
Wyndham continued to experience increases in all of its proprietary
distribution channels. Net wyndham.com reservations were up 11.0 percent,
with total revenue up 19.0 percent. Total room nights booked on wyndham.com
were up 7.1 percent. Wyndham.com continues to lead the online third-party
channels, posting a consumer ADR of $125.53 versus total third-party Internet
sites' net rate to Wyndham of $78.31. Wyndham.com is on track to reach
its $100 million revenue goal for the year.
The Company's call center also posted positive results for the quarter.
Call volume was up 3.3 percent, quarter over quarter. Wyndham ByRequest,
the brand's guest recognition program, now has over 2.1 million members.
Year-to-date, ByRequest members consumed 19.9 percent of total Wyndham-branded
room nights and accounted for 21.3 percent of the Wyndham brand's gross
rooms revenue.
Corporate Finance/Balance Sheet:
At Sept. 30, 2004, Wyndham's total debt was $2.25 billion, a reduction
of $250.0 million versus the second quarter 2004. Company debt breaks down
as follows: Revolver $76.9 million; Term Loan I $949.5 million; Term Loan
II $309.9 million and Mortgage and Other Indebtedness $910.3 million. Wyndham's
total debt excludes $169.4 million in debt related to the Wyndham Anatole,
a third-party owned hotel. Wyndham has no obligation to repay this debt.
Wyndham's liquidity, defined as revolver availability plus cash in its
overnight account, was approximately $197.4 million. The Company continues
to maintain solid liquidity, manage cash tightly and make prudent spending
decisions.
On Oct. 12, 2004, Wyndham announced the resignation of Executive Vice
President and Chief Financial Officer, Richard A. Smith. Elizabeth Schroeder,
former senior vice president of finance and strategic planning, was promoted
to executive vice president and acting chief financial officer for the
Company. Her appointment is expected to be confirmed by Wyndham's Board
of Directors in early 2005.
Nine Months Ended Results:
For the nine months ended Sept. 30, 2004, adjusted EBITDA was $209.3
million. The Company reported a net loss of $398.3 million compared to
$288.0 million from the prior year. The loss is largely attributed to a
$353.7 million impairment resulting from the effects of the impending sales
of 32 non-strategic assets. After the effect of the preferred dividend,
the resulting net loss per share was $3.10 on a fully diluted basis compared
to $2.40 from the prior year.
Enhanced Strategic Plan Update:
In the Company's second quarter 2004 earnings report, Wyndham announced
that it would sell 32 non-strategic properties, primarily located in secondary
or duplicative markets. The reduction of debt in connection with asset
sales more favorably positions Wyndham to take advantage of robust capital
markets with respect to its corporate debt maturities and in turn enhance
its capital program to invest money in its remaining 33 owned and leased
assets.
As of today, Wyndham now has 28 non-strategic assets remaining to be
sold. The Company is expecting to close the sale of these assets by the
end of the first quarter 2005, concluding the asset disposition portion
of the Company's strategic plan.
"When we began our strategic plan in June 1999, Wyndham owned 212 out
of 317 total assets -- the vast majority of these properties were non-proprietary
branded," stated Kleisner. "While our total number of hotels has been reduced
due to our successful asset disposition program, the Wyndham brand has
continued to expand and our debt has been dramatically reduced. The decisions
we've made over the last five years have positioned us well for future
growth."
At the end of its asset disposition program, Wyndham will own or lease
33 hotels and resorts -- including its trophy assets that define the Wyndham
brand. These properties serve as the cornerstone of its hotel portfolio,
which currently represents approximately 150 total Wyndham-branded assets.
The Company will continue to grow its brand through new agreements with
third-party owners, as well as invest in new management agreements for
hotels located in key markets such as New York City, San Francisco, Hawaii
and Seattle.
Additionally, Wyndham is making changes in its corporate office and
operational structure to better align itself with its expected form at
the conclusion of the asset disposition process -- a hotel operating company
with a more balanced portfolio of owned, managed and franchised properties.
It is expected that the Company's reorganization will decrease total expenses,
on an annual basis, between $10.0 and $12.0 million.
As part of this realignment, four Wyndham executives will be leaving
the Company: Ted Teng, president and chief operating officer, whose position
will not be replaced. Kleisner has assumed Teng's duties; Joseph A. Champ,
executive vice president and chief investment officer; Patricia Smith,
executive vice president, human resources; and, Donna DeBerry, executive
vice president, diversity & corporate affairs. DeBerry will continue
to work with Wyndham as a diversity consultant.
Additionally, Wyndham appointed three executives to new positions within
the Company. Judy Hendrick, former senior vice president and treasurer,
has been named executive vice president and chief investment officer; Timothy
L. Fielding, former senior vice president and corporate controller, has
been named executive vice president and chief accounting officer; and Michael
Higa, former vice president of finance, has been appointed to senior vice
president of finance and treasurer in connection with the reorganization.
Future Guidance:
EBITDA guidance for the full year is maintained, as adjusted for asset
sales, in the range of $265.0 to $275.0 million. Further, full year RevPAR
growth is also maintained at positive 6.0 to 7.0 percent.
WYNDHAM INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands) (Unaudited)
Three Months Ended Nine Months Ended
September 30, September
30,
-------------------- ---------------------
2004 2003
2004 2003
--------- ---------- ---------- ----------
Revenues:
Room revenues
$99,837 $95,787 $342,163 $319,731
Food and beverage revenues 49,471
48,728 183,425 175,576
Other revenues
30,248 31,395 108,985
111,308
Anatole hotel revenues
19,129 --
75,410 --
--------- ---------- ---------- ----------
Total hotel revenues
198,685 175,910 709,983
606,615
Management fees and service
fee income
4,254 4,162 13,059
13,012
Interest and other income
1,466 1,693
2,480 3,903
--------- ---------- ---------- ----------
Total revenues
204,405 181,765 725,522
623,530
--------- ---------- ---------- ----------
Expenses:
Room expenses
26,748 25,652 82,465
78,283
Food and beverage expenses 38,071
37,829 126,819 121,976
Other expenses
82,346 79,560 261,983
251,749
Anatole hotel expenses
14,886 --
52,093 --
--------- ---------- ---------- ----------
Total hotel expenses
162,051 143,041 523,360
452,008
General and administrative
costs
13,680 10,961 43,287
41,881
Interest expense
43,608 41,679 135,948
126,785
Interest expense -- Anatole 3,192
-- 9,594
--
--------- ---------- ---------- ----------
Total operating costs and
expenses
222,531 195,681 712,189
620,674
--------- ---------- ---------- ----------
Revenues net of direct
expenses
(18,126) (13,916) 13,333
2,856
Adjustments:
Professional fees and other
26 125
(26) 911
Litigation Settlements
119 15
244 2,185
Abandoned transaction costs
431 (372)
545 66
(Gain)/loss on derivative
instruments
1,974 2,266
3,666 21,135
Loss and damage --
hurricane
2,288 --
2,288 --
Write-off of leasehold
costs
4,689 --
4,667 --
Loss on sale of assets
-- --
-- 4,941
--------- ---------- ---------- ----------
Total adjustments
9,527 2,034 11,384
29,238
--------- ---------- ---------- ----------
Depreciation and
amortization
21,783 26,072 69,827
81,094
Depreciation and
amortization -- Anatole
3,022 --
7,734 --
Equity in earnings from
unconsolidated
subsidiaries
(217) (896) (1,583)
(1,596)
Minority interest in
consolidated subsidiaries
(18) (1,045) (20)
1,025
Minority interest in
consolidated subsidiaries
-- Anatole
(1,262) --
8,152 --
--------- ---------- ---------- ----------
23,308 24,131 84,110
80,523
--------- ---------- ---------- ----------
Loss from continued
operations before taxes
(50,961) (40,081) (82,161) (106,905)
Income tax benefit
(provision)
2,668 3,239
(504) 48,258
--------- ---------- ---------- ----------
Loss from continued
operations
(48,293) (36,842) (82,665) (58,647)
--------- ---------- ---------- ----------
Loss from operations of
discontinued hotels
(2,356) (21,447) (8,768) (43,566)
Gain on sale of assets
48,411 2,777 49,555
7,493
Leasehold termination costs
(31) (164) (1,071)
(151,558)
Impairment of assets held
for sale
(11,499) (37,260) (353,720) (133,842)
--------- ---------- ---------- ----------
Income (loss) from
discontinued operations,
before income taxes
34,525 (56,094) (314,004) (321,473)
Income tax (provision)
benefit
(1,868) 3,839 (1,633)
92,098
--------- ---------- ---------- ----------
Income (loss) from
discontinued operations
32,657 (52,255) (315,637) (229,375)
Net loss
$(15,636) $(89,097) $(398,302) $(288,022)
========= ========== ========== ==========
EBITDA from continuing
operations
$25,829 $29,881 $141,467 $134,022
========= ========== ========== ==========
EBITDA, as adjusted
$43,728 $45,898 $209,282 $209,903
========= ========== ========== ==========
WYNDHAM INTERNATIONAL, INC.
EBITDA Reconciliation
(in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ---------------------
2004 2003
2004 2003
-------------------- ---------------------
EBITDA Reconciliation
Net loss
$(15,636) $(89,097) $(398,302) $(288,022)
Interest expense
43,608 41,679 135,948
126,785
Depreciation and
amortization
21,783 26,072 69,827
81,094
Income tax (benefit)
provision
(2,668) (3,239) 504
(48,258)
--------- ---------- ---------- ----------
EBITDA
47,087 (24,585) (192,023) (128,401)
Interest, depreciation and
amortization from equity
interest in unconsolidated
subsidiaries
1,318 669
4,095 3,241
Interest, depreciation and
amortization attributable
to minority interests
(324) (1,611) (1,259)
(1,076)
Professional fees and other
26 125
(75) 909
Amortization of unearned
compensation
600 747
2,064 1,711
Loss and Damage --
Hurricane
2,288 --
2,288 --
(Gain)loss on derivative
instruments
1,974 2,266
3,666 21,135
Loss on sale of assets
-- --
-- 4,941
Litigation settlements
119 15
244 2,185
Write-off of leasehold
costs
4,689 --
4,667 --
Discontinued operations
adjustment
(14,049) 68,272 385,615
305,258
--------- ---------- ---------- ----------
EBITDA, as adjusted
$43,728 $45,898 $209,282 $209,903
========= ========== ========== ==========
Per Share Calculations:
Loss from continued
operations
$(48,293) $(36,842) $(82,665) $(58,647)
Income (loss) from
discontinued operations
32,657 (52,255) (315,637) (229,375)
--------- ---------- ---------- ----------
Net loss
$(15,636) $(89,097) $(398,302) $(288,022)
Adjustment for preferred
stock
(42,426) (39,254) (124,861) (115,562)
--------- ---------- ---------- ----------
Net loss attributable to
common shareholders
$(58,062) $(128,351) $(523,163) $(403,584)
========= ========== ========== ==========
Basic and diluted loss per
common share:
Loss from continued
operations
$(0.54) $(0.45) $(1.23)
$(1.04)
Income (loss) from
discontinued operations
0.19 (0.31) (1.87)
(1.36)
--------- ---------- ---------- ----------
Loss per common share
$(0.35) $(0.76) $(3.10)
$(2.40)
========= ========== ========== ==========
Basic and diluted weighted
average common shares and
share equivalents
169,285 168,211 168,968
168,099
WYNDHAM
INTERNATIONAL, INC.
2004 OPERATING STATISTICS BY
QUARTER
Third Quarter
Nine Months Ended
September 30
--------------------------- -----------------------------
2004 2003 % Change
2004 2003 % Change
-------- -------- --------- ---------- -------- ---------
COMPARABLE WYNDHAM BRANDED HOTELS (a)
Wyndham Hotels & Resorts
------------
Average
daily
rate $113.51
$108.99 4.1% $129.51
$126.23 2.6%
Occupancy 74.2%
72.7% 1.5 ppt 75.8%
72.5% 3.3 ppt
RevPAR $84.27
$79.19 6.4% $98.22
$91.55 7.3%
Wyndham Luxury Resorts (b)
------------
Average
daily
rate $253.40
$243.58 4.0% $244.94
$237.35 3.2%
Occupancy 60.4%
58.5% 1.9 ppt 53.3%
52.1% 1.2 ppt
RevPAR $153.02 $142.43
7.4% $130.53 $123.73
5.5%
Wyndham Garden
------------
Average
daily
rate
$98.73 $94.23 4.8%
$94.23 $90.90 3.7%
Occupancy 81.4%
78.8% 2.6 ppt 78.3%
78.8% -0.5 ppt
RevPAR $80.37
$74.30 8.2% $73.76
$71.61 3.0%
COMPARABLE OWNED & LEASED HOTELS
Proprietary Branded (c)
------------
Average
daily
rate $120.49
$116.24 3.7% $138.98
$134.69 3.2%
Occupancy 78.1%
78.3% -0.2 ppt 79.2%
76.6% 2.6 ppt
RevPAR $94.11
$90.97 3.5% $110.10
$103.11 6.8%
Non-Proprietary Branded (d)
------------
Average
daily
rate
$86.56 $73.46 17.8%
$84.86 $74.87 13.3%
Occupancy 85.0%
82.3% 2.7 ppt 82.1%
83.8% -1.7 ppt
RevPAR $73.54
$60.47 21.6% $69.70
$62.75 11.1%
Total Portfolio
------------
Average
daily
rate $119.74
$115.33 3.8% $137.83
$133.36 3.4%
Occupancy 78.2%
78.3% -0.1 ppt 79.3%
76.7% 2.6 ppt
RevPAR $93.69
$90.35 3.7% $109.27
$102.29 6.8%
NOTE: All hotel statistics exclude assets sold to date.
(a) Brand statistics are based on comparable owned, managed
and leased
hotels for respective periods.
(b) Reflects results of the Boulders, Carmel Valley Ranch,
Isla
Navidad, Kelly House, and Harbor View.
(c) Reflects Wyndham Hotels & Resorts, Wyndham Luxury
Resorts and
Wyndham Garden Hotels that were branded
as of Jan. 1, 2004.
(d) Non-proprietary brand hotels owned by the Company
as of Jan. 1,
2004. |
Based in Dallas, Wyndham International, Inc. offers upscale and luxury
hotel and resort accommodations through proprietary lodging brands and
a management services division. Wyndham owns, leases, manages and franchises
hotels and resorts in the U.S., Canada, Mexico, the Caribbean and Europe.
This press release contains certain forward-looking statements within
the meaning of Sections 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, including projections about future
operating results.
|