Fiscal Third Quarter Results In Line With
Analyst Consensus
BOCA RATON, Fla., April 29, 2002 - Boca Resorts, Inc. (NYSE: RST),
an owner and operator of luxury resorts in Florida, reported net income
of $16.1 million, or $0.40 per diluted share, for the three months ended
March 31, 2002 which is in line with the average consensus estimate as
reported by market service, First Call/Thomson Financial. This compares
to net income of $26.6 million, or $0.64 per diluted share, for the three
months ended March 31, 2001. The decrease in operating results during
the three months ended March 31, 2002 compared to the three months ended
March 31, 2001 was substantially because a provision for income taxes totaling
$10.7 million was recorded during the recently completed quarter, while
no provision was recorded for the comparable prior year three-month period.
Additional details relating to the comparative operating results are set
forth below.
QUARTERLY COMPARISON TO PRIOR YEAR
Leisure and recreation revenue totaled $100.0 million and $102.0 million
for the three months ended March 31, 2002 and 2001, respectively.
The $2.0 million decrease in revenue was primarily due to a decline in
occupancy to 77.8% for the three months ended March 31, 2002, from 82.4%
for the same period of the prior year and a decline in the average daily
rate to $282.46 for the three months ended March 31, 2002, from $287.75
for the year ago period. While the Company continued to face a challenging
operating environment, demand rebounded sharply during the recently completed
three-month period as compared to that experienced in the months immediately
subsequent to the September 11 terrorist attacks.
Operating expenses totaled $67.2 million and $64.4 million for the three
months ended March 31, 2002 and 2001, respectively. After considering
a $1.3 million credit to S,G&A expense during the prior year three-month
period for non-recurring insurance proceeds, the increase in operating
expenses primarily consisted of a $916,000 rise in depreciation expense
following the completion of several capital projects at the Company's resorts.
Interest expense, net of interest income, totaled $6.0 million for the
three months ended March 31, 2002, down from $7.9 million for the three
months ended March 31, 2001. The decrease resulted from the use of
proceeds from the sale of the Arizona Biltmore Resort & Spa and entertainment
and sports business to reduce debt.
A provision for income taxes totaling $10.7 million was recorded for
the recently completed quarter, while no provision was recorded for the
comparable prior year three-month period due to an offsetting decrease
in the Company's tax valuation allowance.
During the three months ended March 31, 2001, the Company incurred a
$1.3 million loss from discontinued operations relating to its entertainment
and sports business (which primarily consisted of the Florida Panthers
Hockey Club and related arena operations), which was sold in July 2001.
The Company also recognized a $1.8 million extraordinary loss on the early
extinguishment of debt during the prior year three-month period relating
to the repurchase of $60.0 million principal amount of its 9.875% senior
subordinated notes. The extraordinary loss substantially represents
the non-cash charge-off of a pro rata portion of the debt issuance costs
previously capitalized when the notes were issued.
NINE-MONTH COMPARISON TO PRIOR YEAR
Leisure and recreation revenue totaled $197.3 million and $257.1 million
for the nine months ended March 31, 2002 and 2001, respectively.
The $59.8 million decrease in leisure and recreation revenue was partially
because the prior year nine-month period included $39.9 million in revenue
from the Arizona Biltmore Resort & Spa, which was sold in December
2000. In addition, leisure and recreation revenue decreased due to
a decline in same-hotel occupancy to 60.1% for the nine months ended March
31, 2002, from 70.4% for the same period of the prior year as a result
of travel disruption and short-term cancellations of group business in
the wake of the September 11 terrorist attacks.
Operating expenses totaled $175.5 million and $208.4 million for the
nine months ended March 31, 2002 and 2001, respectively. The $32.9
million decrease in operating expenses during the recently concluded nine-month
period compared to the nine months March 31, 2001 was primarily because
the prior year nine-month period included $31.4 million in operating expenses
from the Arizona Biltmore Resort & Spa.
Interest expense, net of interest income, totaled $17.1 million for
the nine months ended March 31, 2002, down from $34.4 million for the nine
months ended March 31, 2001. The decrease resulted from the use of
proceeds from the sale of the Arizona Biltmore Resort & Spa and entertainment
and sports business to reduce debt.
A provision for income taxes totaling $1.9 million was recorded for
the nine months ended March 31, 2002, while no provision was recorded for
the comparable prior year nine-month period due to an offsetting decrease
in the Company's tax valuation allowance.
The Company recorded a gain on the disposition of the entertainment
and sports business totaling $23.7 million during the nine months ended
March 31, 2002 and incurred a loss from discontinued operations of $12.1
million during the nine months ended March 31, 2001. The Company
also recognized an extraordinary loss on the early extinguishment of debt
relating to the repurchase of a portion of its 9.875% senior subordinated
notes in the amount of $1.0 million and $1.8 million during the nine months
ended March 31, 2002 and 2001, respectively. The extraordinary loss
substantially represents the non-cash charge-off of a pro rata portion
of the debt issuance costs previously capitalized when the notes were issued.
CURRENT INDICATORS AND MANAGEMENT OUTLOOK
While the Company is experiencing a slower than anticipated recovery,
management is cautiously optimistic it will see continued improvements
in RevPAR, EBITDA and EBITDA margin comparisons to the prior year quarters.
BALANCE SHEET DATA
At March 31, 2002, the Company had cash and cash equivalents of $9.6
million and indebtedness totaling $216.3 million. The Company also
maintains a revolving credit line, which expires in October 2003 that represents
an additional and immediate potential source of liquidity. As of
March 31, 2002, the Company had no outstanding balance under the credit
facility and was eligible to borrow up to $129.3 million.
CAPITAL ENHANCEMENT UPDATE
Capital enhancements totaled $61.9 million during the nine months ended
March 31, 2002. At the Boca Raton Resort & Club, a new state-of-the-art
spa complex, as well as new golf clubhouse with casual restaurant, opened
in December 2001 and a new 112 water-view rooms Yacht Club opened in January
2002. Management recently approved a number of additional capital
development initiatives including a comprehensive room renovation of the
tower rooms at the Registry Resort located in Naples, Florida and a marina
renovation at the Radisson Bahia Mar Resort and Yachting Center located
in Fort Lauderdale, Florida.
David S. Feder, President and Chief Operating Officer of Boca Resorts,
Inc. commented, "While the comparison to last year has been difficult in
the wake of the September 11 tragedy and we acknowledge that the next several
quarters will be challenging, we are pleased with the business recovery
to date and are optimistic that operations are returning to more normal
levels. Our balance sheet is extremely strong and our resort portfolio
continues to be well positioned particularly following the completion of
several capital enhancements, which have historically helped us outperform
our competition."
BOCA RESORTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended March 31
(In thousands, except per share data)
(Unaudited)
Three Months
Nine months
2002 2001(1)
2002 2001(1)
Leisure and recreation revenue
$99,988 $101,986
$197,290 $257,116 Operating expenses:
Cost of leisure and
recreation services
37,091 37,055
89,029 111,672
Selling, general and
administrative
expenses
21,479 19,628
61,627 69,770
Amortization and
depreciation
8,615 7,699
24,843 26,953
Total operating
expenses
67,185 64,382
175,499 208,395
Operating income
32,803 37,604
21,791 48,721
Interest and other income
50 2,582
1,034 4,067
Interest and other expense
(6,026) (10,514)
(18,138) (38,465)
Income from continuing
operations before
income taxes
26,827 29,672
4,687 14,323
Provision for income taxes (2)
(10,731) ---
(1,875) ---
Income from continuing
operations
16,096 29,672
2,812 14,323
Loss from discontinued
operations, net of
income tax benefit
--- (1,273)
--- (12,075)
Gain on disposition of
discontinued operations,
net of income taxes
--- ---
23,728 ---
Extraordinary loss on
early retirement of
debt, net of income tax
benefit
--- (1,823)
(968) (1,823)
Net income
$16,096 $ 26,576
$25,572 $ 425
Income per share from
continuing operations
$0.40 $0.73
$0.07 $0.35
Income (loss) per
share from discontinued
operations
--- (0.03)
0.60 (0.30)
Loss per share from extraordinary item
--- (0.04)
(0.02) (0.04)
Net income per share - basic
$0.40 $0.65
$0.64 $0.01
Income per share from
continuing operations
$0.40 $0.71
$0.07 $0.35
Income (loss) per share
from discontinued
operations
--- (0.03)
0.59 (0.29)
Loss per share from extraordinary item
--- (0.04)
(0.02) (0.04)
Net income per share - diluted
$0.40 $0.64
$0.63 $0.01
Shares used in
computing income
(loss) per share
- basic
39,749 40,887
39,798 40,887
Shares used in
computing income
(loss) per share
- diluted
40,656 41,666
40,557 41,502
(1) The operating results for the entertainment
and sports business have been classified as discontinued operations because
this business was sold in July 2001. In addition, the nine months
ended March 31, 2001 includes $39.9 million in revenue associated with
the Arizona Biltmore Resort & Spa. See accompanying pro forma
data, excluding the Arizona Biltmore Resort & Spa.
(2) The Company recorded a provision
for income taxes during the three and nine months ended March 31, 2002.
No provision for income taxes was recorded during the three and nine months
ending March 31, 2001 due to an offsetting decrease in the Company's tax
valuation allowance.
BOCA RESORTS, INC.
CONSOLIDATED PRO FORMA OPERATING DATA (1)
For the Three and Nine Months Ended March 31
(In thousands)
(Unaudited)
Three Months
Nine months
2002 2001 (1)
2002 2001 (1)
Leisure and recreation revenue
$99,988 $101,986
$197,290 $217,260
Operating expenses:
Cost of leisure and
recreation services
37,091 37,055
89,029 94,998
Selling, general and
administrative
expenses
21,479 19,628
61,627 59,155
Amortization and
depreciation
8,615 7,699
24,843 22,432
Total operating
expenses
67,185 64,382
175,499 176,585
Operating income
32,803 37,604
21,791 40,675
Interest and other income
50 111
1,034 1,010
Interest and other expense
(6,026) (5,865)
(18,138) (19,321)
Income from continuing
operations before
income taxes
$26,827 $31,850
$4,687 $22,364
EBITDA
$41,418 $45,303
$46,634 $63,107
Adjusted EBITDA (2)
$42,920 $48,809
$50,734 $71,844
(1) Information is set forth on a pro
forma basis, which excludes the operating results from the Arizona Biltmore
Resort & Spa which was sold in December 2000 and the entertainment
and sports business which was sold in July 2001 and gives effect to the
application of the related proceeds as if such assets were sold at the
beginning of each period presented. Accordingly, interest and other
expense is presented as if the Company utilized the proceeds from the sales
to reduce indebtedness at the beginning of the prior year periods.
Management believes the pro forma data provides readers meaningful comparison
of the periods presented.
(2) Adjusted EBITDA represents EBITDA
plus the amount of net membership fees deferred during the period.
The net membership fees deferred during the period represents the change
in deferred revenue arising from the Premier Clubs at the Boca Raton Resort
and Club and Naples Grande and the Grande Oaks Golf Club.
BOCA
RESORTS, INC.
SAME RESORT DATA (1)
For the Three and Nine Months Ended March 31
(Unaudited)
Three Months
Nine months
2002 2001
2002 2001
Available room nights 205,266
201,510 617,242
613,588
Occupancy %
77.8% 82.4%
60.1% 70.4%
ADR
$282.46 $287.75
$216.04 $215.80
RevPar
$219.76 $237.02
$129.85 $151.97
Total RevPar
$487.11 $506.11
$319.64 $354.09
(1) Represents the Company's resort
portfolio information excluding the results from the Arizona Biltmore Resort
& Spa for each period presented. |
Boca Resorts, Inc. owns luxury resort properties and golf courses in
Florida. The Company's Florida resort and golf portfolio includes
the Boca Raton Resort & Club; the Registry Resort at Pelican Bay, the
Edgewater Beach Hotel and Naples Grande Golf Club in Naples; and the Hyatt
Regency Pier 66 Hotel and Marina, the Radisson Bahia Mar Resort and Yachting
Center and Grande Oaks Golf Club in Fort Lauderdale.
Statements in this press release regarding Boca Resorts, Inc.'s business
which are not historical facts are "forward-looking statements" that involve
risks and uncertainties. |
