of $89.1 for Prior Year; Total Debt Now $2.25 billion,
a Reduction of $250.0 million from 2nd Qtr 2004
/ Hotel Operating Performance
|Wyndham International Reports Third Quarter 2004 Results
DALLAS - Nov. 9, 2004--Wyndham International (AMEX:WBR):
"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:
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).
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.
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.
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.
Wyndham International, Inc.
|Also See:||Wyndham Brand Restrictions Lifted in New York City; Company Purchases Lease of Wyndham Hotel in Manhattan / August 2004|
|Owners Hope the Wyndham Banner Will Provide Success for the Lincoln Plaza Hotel & Conference Center in Reading, Pennsylvania / March 2004|
|Wyndham Management Shake-up Part of Corporate Right-sizing Program; Departing executives include Ted Teng, president and COO and Richard Smith, EVP and COO / October 2004|