Both the Gaylord Palms and Gaylord Texan
Hotel Operating Statistics
Gaylord National Bookings Off To A Strong Start
NASHVILLE, Tenn. - Feb. 15, 2005 -- Gaylord Entertainment Co. (NYSE: GET) today reported its financial results for the fourth quarter of 2004.
For the fourth quarter ended Dec. 31, 2004:
Reed continued, "Our hospitality business has been strengthened with the addition of the Texan, as it has solidified our rotational strategy with our customers. Our strategy to provide convention center hotels with state-of-the-art exhibition facilities, exemplary customer service and top-notch restaurants and entertainment offerings all under one roof is unique and unmatched in the marketplace. We have made great strides in 2004 by building great relationships with our STARS, delivering great customer satisfaction, and being rewarded with strong long-term bookings."
"We enter 2005 with plans to continue growth in our overall business and to build on the positive reputation of the Gaylord Hotels brand as we plan for Gaylord National," said Reed. "While we made significant progress in ResortQuest during 2004, we still have work to do. During this last year, we mapped out our technology, brand, and website plans. We are excited about rolling out these industry-defining strategies we feel will position ResortQuest for sustainable growth and clear market leadership."
Segment Operating Results
Key components of the company's hospitality segment for the fourth quarter of 2004 include:
At the property level, Gaylord Opryland generated RevPAR of $106.69 in the fourth quarter of 2004 versus $105.38 in the fourth quarter of 2003, a 1.2 percent increase. Occupancy decreased by 0.3 percentage points to 72.8 percent. ADR was $146.63, up 1.7 percent compared to the fourth quarter of 2003. Total RevPAR in the quarter decreased 8.3 percent to $220.71.
Gaylord Palms generated RevPAR of $111.22 in the fourth quarter of 2004, compared to $91.93, in the same period of 2003, an increase of 21.0 percent. Occupancy at the Palms increased by 8.4 percentage points during the quarter to 69.0 percent from 60.6 percent a year ago, due to increases in both group and transient business. The Gaylord Palms holiday show "ICE" surpassed all expectations in its second year of operation. The success of this holiday entertainment event attracted a significant amount of local and transient guests to the hotel, in this usually slow period for group business. ADR was $161.28 for the quarter, up 6.3 percent compared to the prior year. Total RevPAR at Gaylord Palms increased 21.2 percent to $290.41 in the fourth quarter of 2004.
The Gaylord Texan generated RevPAR of $98.41 in the fourth quarter of 2004, with occupancy of 65.8 percent and ADR of $149.67. Total RevPAR at the Gaylord Texan was $273.04 in the fourth quarter of 2004 as there was continued excitement about the hotel's restaurants and seasonal promotions from the local Dallas and Fort Worth residents. The Gaylord Texan's operating margins continued to improve in the fourth quarter as the property achieved increasing operating efficiencies. "We are very pleased with the results of the Gaylord Texan in its first year of operation," said Reed. "Our property has put the Dallas market back on the map in the eyes of our meeting planner customers, and demonstrates our ability to generate supply-induced demand into new markets. Moreover, we expect the property to continue to expand margins as we fine tune our operations and grow occupancy."
For the fourth quarter of 2004, ResortQuest revenues were $37.6 million and operating loss was $10.3 million. ResortQuest CCF was a negative $7.6 million for the period. This performance reflects the typical seasonality of the ResortQuest segment. Also in the fourth quarter of 2004, ResortQuest exited the external software development business by selling certain assets of First Resort Software. As a result of this sale, ResortQuest recorded a pre-tax loss of $1.8 million.
Fourth quarter occupancy for ResortQuest increased to 41.9 percent, up 2.3 percentage points from the 2003 period. ADR increased to $120.24 from $112.15 in the fourth quarter of 2003. ResortQuest had 17,035 units under exclusive management at the end of the fourth quarter, including units out of service damaged by the Florida hurricanes in the third quarter of 2004.
By year-end, over 50 percent of ResortQuest units damaged in last summer's Florida hurricanes have been returned to service. The company anticipates that percentage of recovered units to exceed 75 percent by the end of the first quarter of 2005.
"2004 was a crucial year for ResortQuest as we laid the foundation for future growth," said Reed. "We are pleased with the progress we have made in re-establishing the brand, advancing the technology infrastructure, selectively growing inventory, and improving the overall customer experience. 2005 will be an inflection point for ResortQuest as we execute our business development strategy, grow our top-line, and invest in marketing initiatives to expand awareness of the brand."
In the first two months of 2005, ResortQuest closed on the acquisition of certain vacation rental management operations from East-West Resorts and the Whistler Lodging Company. These acquisitions added approximately 2,500 high-quality units to ResortQuest inventory.
Opry and Attractions
Opry and Attractions revenues were $18.8 million in the fourth quarter of 2004 compared to $16.1 million in the fourth quarter of 2003. The operating income in the Opry and Attractions segment was $2.3 million in the fourth quarter of 2004 compared to break-even operating income in the fourth quarter of 2003. Opry and Attractions CCF increased to $3.6 million in the fourth quarter from $1.3 million in the same period a year ago. The Grand Ole Opry had a strong quarter showing an attendance increase of 1.1 percent over the fourth quarter of 2003. The addition of the Great American Country cable network to DirecTV also helped to increase the number of households viewing the Opry's weekly television show, Grand Ole Opry Live. The Opry's first-ever presenting sponsorship with Cracker Barrel Old Country Store, announced in October 2004, is also helping to further increase exposure for the Opry brand to the millions of Cracker Barrel consumers in more than 500 stores in 41 states.
"The fourth quarter showcased some of the very best of the Grand Ole Opry with the American Road Show finishing a strong season, a very successful Country Music Awards show, and a continued great relationship with the Great American Country television network," said Reed.
Corporate and Other
Corporate and Other operating loss totaled $11.4 million for the fourth quarter of 2004, compared to an operating loss of $12.0 million for the fourth quarter of 2003. Corporate and Other operating losses included non-cash expenses of $1.2 million for the fourth quarter of 2004 and $1.8 million for fourth quarter 2003. These expenses include items such as depreciation, amortization and the non-cash portion of the Gaylord Entertainment Center naming-rights agreement expense. Corporate and Other CCF was a loss of $9.7 million in the fourth quarter of 2004 compared to a loss of $9.3 million in the fourth quarter of 2003.
Bass Pro Shops
As previously disclosed, on July 8, 2004, Bass Pro, Inc., ("Bass Pro") redeemed the approximate 28.5 percent stake held in Bass Pro by private equity investor J. W. Childs Associates. As a result, Gaylord's ownership stake in Bass Pro increased from 19.0 percent to 26.6 percent. Consequently, Gaylord began accounting for its interest in Bass Pro using the equity method of accounting in the third quarter of 2004. The equity method of accounting, through which Gaylord will account for its proportionate share of Bass Pro's income going forward, has been applied retroactively to all periods presented.
For the quarter ended December 31, 2004, Gaylord's equity income from the investment was $0.4 million. For the full year 2004, Gaylord's equity income from the Bass Pro investment was $3.8 million. Gaylord reflects the results of Bass Pro one month in arrears, consequently Bass Pro financial results are for the twelve months ended as of November 30, 2004.
Bass Pro currently operates 26 stores and has stated that it plans to add 15 to 17 stores over the next two years.
At December 31, 2004, the company had long term debt outstanding of $575.9 million and unrestricted and restricted cash of $117.6 million. On November 30, 2004, Gaylord issued $225 million of senior unsecured subordinated notes priced at 6.75 percent and due in 2014. The company used the net proceeds of the issuance to pay off $192.5 million of principal and accrued interest outstanding on the Nashville hotel senior loan, which was priced at LIBOR + 120 basis points and secured by the Gaylord Opryland hotel, and the remainder for general corporate purposes. At year-end 2004, the company had nothing drawn under its $100 million revolving credit facility.
The following outlook is based on current information as of February 15, 2005, and includes the impact from the consolidation of ResortQuest. The company does not expect to update guidance until next quarter's earnings release. However, the company may update its full business outlook or any portion thereof at any time for any reason.
"In 2005, we intend to continue to execute upon the strategy laid out
in 2004, which we currently expect will deliver 7 to 9 percent growth in
RevPAR and 35 to 50 percent growth in CCF," said Reed. "For ResortQuest,
2005 is our year of transition from redevelopment to growth as we grow
revenues approximately 20 percent and we reinvest in marketing initiatives.
Overall, we are optimistic about the outlook for business performance in
While not included in the estimates above, with the implementation of
the Financial Accounting Standard Board's (FASB) Statement No. 123R requiring
the expensing of options, the company estimates that the third and fourth
quarter 2005 pre-tax earnings will be reduced by a total of $3.0 million.
In 2006, options are expected to reduce pre-tax earnings by $6.0 to $7.0
million for the full year.
Gaylord Entertainment (NYSE: GET), a leading hospitality and entertainment company based in Nashville, Tenn., owns and operates three industry-leading brands - Gaylord Hotels (www.gaylordhotels.com), its network of upscale, meetings-focused resorts, ResortQuest (www.resortquest.com), the nation's largest vacation rental property management company, and the Grand Ole Opry (www.opry.com), the weekly showcase of country music's finest performers for 79 consecutive years. The company's entertainment brands and properties include the Radisson Hotel Opryland, Ryman Auditorium, General Jackson Showboat, Springhouse Links, Wildhorse Saloon, and WSM-AM.
This press release contains statements as to the company's beliefs and expectations of the outcome of future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.
|Also See:||New Management Turns Gaylord Entertainment into Hospitality Industry Giant / March 2004|
|Gaylord Entertainment Reports 3rd Qtr Net Loss of $3.2 million; Opening of Gaylord Texan Resort & Convention Center Boosts Revenues / Hotel Operating Statistics / October 2004|
|Gaylord Entertainment Reports 2nd Qtr Net Loss of $23.3 million; The Gaylord Texan Resort & Convention Center Opens During 2nd Qtr / Hotel Operating Statistics / July 2004|