PARSIPPANY, N.J., April 24, 2014 -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended March 31, 2014.
First Quarter Highlights:
- Adjusted diluted earnings per share (EPS) was $0.78, an increase of 10% from adjusted diluted EPS of $0.71 in the first quarter of 2013. Reported diluted EPS was $0.69, compared with $0.19 in the first quarter of 2013.
- Domestic RevPAR up 7.6%.
- Net Vacation Ownership Interest sales up 15%.
- The Company repurchased 2.1 million shares of its common stock for $150 million.
We are off to a great start in 2014," said Stephen P. Holmes, chairman and CEO. "In our Hotel Group, domestic RevPAR growth accelerated. In Vacation Ownership, a combination of increased sales and a lower loan loss provision drove strong revenue growth. In our Exchange and Rentals business, peak season summer vacation rental bookings are up from last year. We continued to generate strong free cash flow and to return a significant portion of that cash to shareholders."
FIRST QUARTER 2014 OPERATING RESULTS
First quarter revenues were $1.2 billion, an increase of 5% from the prior year period. The increase reflects growth in the Company's lodging and vacation ownership business segments.
Adjusted net income was $102 million, or $0.78 per diluted share, compared with $98 million, or $0.71 per diluted share for the same period in 2013. The performance reflects solid operating results across all of the Company's businesses and lower interest expense. EPS growth also benefited from the Company's share repurchase program.
Reported net income for the first quarter of 2014 was $90 million, or $0.69 per diluted share, compared with $27 million, or $0.19 per diluted share, for the first quarter of 2013. Reported net income included several items not included in adjusted net income. The net result of these items unfavorably impacted first quarter 2014 net income by $12 million and unfavorably impacted first quarter 2013 net income by $71 million. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.
Free cash flow was $269 million for the three months ended March 31, 2014, compared with $233 million for the same period in 2013. The growth of free cash flow largely reflects favorable timing of working capital. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. For the three months ended March 31, 2014, net cash provided by operating activities was $315 million, compared with $274 million in the prior year period.
BUSINESS UNIT RESULTS
Lodging (Wyndham Hotel Group)
Revenues were $237 million in the first quarter of 2014, a 7% increase over the first quarter of 2013. The increase reflects higher RevPAR, franchise fees and EBITDA-neutral hotel management reimbursable fees.
Total system-wide RevPAR increased 4.0% compared with the first quarter of 2013. The increase reflects a 7.6% domestic increase, partially offset by a 4.3% decline in international RevPAR, primarily reflecting unfavorable currency movements.
Adjusted EBITDA for the first quarter of 2014 was $68 million, a 17% increase compared with the first quarter of 2013. The increase was primarily due to the revenue increases and the favorable timing of marketing expenditures.
As of March 31, 2014, the Company's hotel system consisted of approximately 7,500 properties and 646,900 rooms, a 2.4% room increase compared with the first quarter of 2013. The development pipeline included over 955 hotels and approximately 117,000 rooms, of which 60% were international and 69% were new construction.
Vacation Exchange and Rentals (Wyndham Exchange & Rentals)
Revenues were $379 million in the first quarter of 2014, a 1% increase over the first quarter of 2013. In constant currency, revenues were flat.
Exchange revenues were $187 million, a decline of 3% from the first quarter of 2013. In constant currency, exchange revenues declined 2%, as a 1.6% increase in average number of members was offset by a 3.7% decline in exchange revenue per member.
Vacation rental revenues were $176 million, a 6% increase over the first quarter of 2013. Excluding foreign currency, vacation rental revenues were up 2%, reflecting a 1.4% increase in transaction volume and a 0.8% increase in the average net price per vacation rental.
Adjusted EBITDA for the first quarter of 2014 was $95 million, a 1% increase compared with the first quarter of 2013, reflecting the impact of foreign currency and acquisitions.
Vacation Ownership (Wyndham Vacation Ownership)
Revenues were $593 million in the first quarter of 2014, an 8% increase over the first quarter of 2013, primarily reflecting higher gross VOI sales and a lower loan loss provision.
Gross VOI sales were $410 million in the first quarter of 2014, an increase of 7% over the first quarter of 2013, reflecting a 4.3% increase in tour flow and a 2.8% increase in volume per guest.
Adjusted EBITDA for the first quarter of 2014 was $115 million, a 2% increase compared with the first quarter of 2013, reflecting the revenue increases. Excluding the favorable resolution of a lawsuit in the prior-year quarter, adjusted EBITDA increased an additional $11 million.
- The Company repurchased 2.1 million shares of common stock for $150 million during the first quarter of 2014. From April 1 through April 23, 2014, the Company repurchased an additional 0.6 million shares for $42 million. The Company's remaining share repurchase authorization totals $476 million as of April 23, 2014.
- Net interest expense in the first quarter of 2014 was $25 million, compared with $30 million in the first quarter of 2013, reflecting lower rates associated with recent financings and the benefit of a fixed-for-floating rate swap.
Balance Sheet Information as of March 31, 2014:
- Cash and cash equivalents of $203 million, compared with $194 million at December 31, 2013
- Vacation ownership contract receivables, net, of $2.7 billion, compared with $2.8 billion at December 31, 2013
- Vacation ownership and other inventory of $1.0 billion, unchanged from December 31, 2013
- Securitized vacation ownership debt of $2.0 billion, compared with $1.9 billion at December 31, 2013
- Long-term debt of $2.9 billion, unchanged from December 31, 2013. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.3 billion as of March 31, 2014, unchanged from December 31, 2013
A schedule of debt is included in Table 5 of this press release.
The guidance excludes possible future share repurchases, while analysts' estimates often include share repurchases. This results in discrepancies between Company guidance and database consensus forecasts.
For the full year 2014, the Company provides the following guidance:
- Revenues of approximately $5.250 - $5.350 billion
- Adjusted EBITDA of approximately $1.215 - $1.240 billion
- Adjusted EPS of approximately $4.23 - $4.33 based on a diluted share count of 130 million
To view corresponding tables for this release please visit: