MIAMI, FL (May 07, 2010) — Interval Leisure Group yesterday announced results for the three months ended March 31, 2010.
“ILG’s steady state results reflect the strength of our business model and the execution of our dedicated team,” said Craig M. Nash, Chairman, President and Chief Executive Officer of Interval Leisure Group. “Through a variety of initiatives, we have continued to invest in our core business, provide value to developers and engage members. When compared to many other hospitality and leisure companies, Interval has delivered consistently positive operating results throughout the economic downtown.”
“During the quarter, we made additional prepayments to reduce debt while generating nearly $29 million in free cash flow,” Nash added.
Financial Summary & Operating Metrics (in millions, except per share amounts and percentages)
Metrics T T Q hree hree uarter Months Months Over Ended Ended Quarter 3/31/10 3/31/09 Change ---------------------------------------------- ------- -------- ------- Revenue $113.8 $112.9 0.8% Interval revenue $97.5 $97.3 0.2% Aston revenue $16.3 $15.6 4.4% Gross profit $79.7 $79.2 0.6% Net income attributable to common stockholders $15.4 $16.8 (8.4%) Diluted EPS $0.27 $0.30 (10.0%) EBITDA* $46.3 $46.6 (0.5%) Balance sheet data A A s of s of 3/31/10 12/31/09 ---------------------------------------------- ------- -------- Cash and cash equivalents $177.1 $160.0 Debt $385.8 $395.3 Cash flow data T T hree hree Months Months Ended Ended 3/31/10 3/31/09 ---------------------------------------------- ------- -------- Net cash provided by operating activities $32.5 $13.7 Free cash flow* $28.9 $10.0
* “EBITDA” and “Free cash flow” are non-GAAP measures as defined by the Securities and Exchange Commission (the “SEC”). Please see “Glossary of Terms” and “Reconciliations of Non-GAAP Measures” below for an explanation of non-GAAP measures used throughout this release.
Discussion of Results
First Quarter 2010 Consolidated Operating Results
Consolidated revenue for the first quarter ended March 31, 2010 was $113.8 million, an increase of 0.8% from $112.9 million for the first quarter of 2009. In constant currency, consolidated revenue for the first quarter of 2010 would have been $113.0 million. Consolidated revenue was comprised of 86% and 14% from Interval and Aston, respectively.
Net income for the three months ended March 31, 2010 was $15.4 million, a decrease of 8.4% from net income of $16.8 million for the same period of 2009. Diluted earnings per share were $0.27 compared to diluted earnings per share of $0.30 for the same period of 2009.
EBITDA was $46.3 million for the quarter ended March 31, 2010, compared to EBITDA of $46.6 million for the same period of 2009. In constant currency, EBITDA for the first quarter of 2010 would have been $46.1 million.
Business Segment Results
Interval’s revenue for the three months ended March 31, 2010, was $97.5 million increasing 0.2% over the comparable period in 2009. In constant currency, Interval segment revenue for the first quarter of 2010 would have been $96.7 million.
For the first quarter of 2010, transaction and membership fee revenue were $59.0 million and $32.5 million, respectively, an increase of 0.6% and a decrease of 1.7% over the same period in 2009.
Total active members at March 31, 2010 were approximately 1,826,000, a decrease of 3.6% over total active members of approximately 1,893,000 at March 31, 2009. Average revenue per member for the first quarter of 2010 increased to $51.31 an increase of 4.3% from the first quarter of 2009. During the first quarter of 2010, Interval affiliated 14 new vacation ownership resorts in domestic and international markets.
Interval’s EBITDA was $44.5 million in the first quarter which is comparable to the segment’s EBITDA of $44.3 million in the first quarter 2009. In constant currency, Interval segment EBITDA for the first quarter of 2010 would have been consistent with 2009.
Aston’s revenue for the three months ended March 31, 2010 was $16.3 million, an increase of 4.4% from the comparable period of 2009. Aston’s revenue for the first quarter included $10.3 million of pass-through revenue (defined below), an increase of 13.0% from the prior year period. Management fee revenue for the first quarter of 2010 was $6.0 million, a decline of 7.6% from the first quarter of 2009.
The decrease in Aston management fee revenue was primarily driven by a reduction in revenue per available room (“RevPAR”). RevPAR for the quarter ended March 31, 2010 was $102.80 compared to $112.12 for the same period in 2009, a decline of 8.3%. Lower average daily rate, offset by a slight increase in occupancy, led to the overall reduction in RevPAR. Aston has been generally tracking the results of comparable properties in the Hawaiian market.
Aston reported EBITDA of $1.8 million in the first quarter of 2010, a decrease of 20.9% from EBITDA of $2.3 million in the prior year period.
Capital Resources and Liquidity
As of March 31, 2010, ILG’s cash and cash equivalents totaled $177.1 million, compared to $160.0 million as of December 31, 2009. The Company’s total debt outstanding was $385.8 million, net of unamortized bond discount, as of March 31, 2010. During the current quarter, the Company made a $10 million voluntary prepayment of principal on its term loan.
For the first quarter of 2010, ILG’s capital expenditures totaled $3.6 million, or 3.2% of revenue, net cash provided by operating activities was $32.5 million and free cash flow (defined below) was $28.9 million. Total interest paid during the first quarter was $15.1 million.
Presentation of Financial Information
ILG management believes that the presentation of non-generally accepted accounting principles (non-GAAP) financial measures, including, among others, EBITDA, and free cash flow, serves to enhance the understanding of ILG’s performance. These non-GAAP financial measures should be considered in addition to and not as substitutes for, or superior to, measures of financial performance prepared in accordance with generally accepted accounting principles (GAAP). In addition, EBITDA (as defined) is used to calculate compliance with certain financial covenants in ILG’s credit agreement. Management believes that these non-GAAP measures improve the transparency of our disclosures, provide meaningful presentations of our results from our business operations excluding the impact of certain items not related to our core business operations and improve the period to period comparability of results from business operations. These measures may also be useful in comparing our results to those of other companies, however, our calculations may differ from the calculations of these measures used by other companies. More information about the non-GAAP financial measures, including reconciliations of GAAP results to the non-GAAP measures, is available in the financial tables that accompany this press release.
ILG will host a conference call today at 4:30 p.m. Eastern Daylight Time to discuss its results for the first quarter 2010, with access via the Internet and telephone. Investors and analysts may participate in the live conference call by dialing (866) 322-1501 (toll-free domestic) or (706) 679-2585 (international); conference ID: 68757657 password: Interval. Please register at least 10 minutes before the conference call begins. A live webcast of the conference call will be available on the Investor Relations section of ILG’s Web site at www.iilg.com. A replay of the call will be available for 10 days via telephone starting approximately two hours after the call ends. The replay can be accessed at (800) 642-1687 (toll-free domestic) or (706) 645-9291 (international); passcode: 68757657. The webcast will be archived on ILG’s Web site for 90 days after the call.
About Interval Leisure Group
Interval Leisure Group (ILG) is a leading global provider of membership and leisure services to the vacation industry.
Its principal business segment, Interval, has been serving the vacation ownership market for more than 34 years. Interval operates mainly through Interval International, a membership-based organization that offers a comprehensive array of year-round benefits, including the opportunity to exchange the use of shared ownership vacation time. Today, Interval’s primary vacation exchange network comprises more than 2,500 resorts in over 75 nations. With offices in 15 countries, Interval offers high-quality products and benefits to resort clients and approximately 2 million families who are enrolled in various membership programs.
ILG’s other business segment is Aston which traces its roots in lodging back 60 years. Through a portfolio of approximately 5,000 units, Aston Hotels & Resorts and Maui Condo and Home provide hotel and resort management and vacation rental services to vacationers and property owners primarily in the Hawaiian Islands.
ILG is headquartered in Miami, Florida, and has more than 2,500 employees worldwide.
More information about the company is available at www.iilg.com
This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, relating to: our future financial performance, our business prospects and strategy, anticipated financial position, liquidity and capital needs and other similar matters. These forward- looking statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
Actual results could differ materially from those contained in the forward-looking statements included herein for a variety of reasons, including, among others: adverse trends in economic conditions generally or in the vacation ownership, vacation rental and travel industries; adverse changes to, or interruptions in, relationships with third parties; lack of available financing for or insolvency of developers; decreased demand from prospective purchasers of vacation interests; travel related health concerns, such as pandemics; changes in our senior management; regulatory changes; our ability to compete effectively; the effects of our significant indebtedness and our compliance with the terms thereof; adverse events or trends in key vacation destinations; and our ability to expand successfully in international markets and manage risks specific to international operations. Certain of these and other risks and uncertainties are discussed in our filings with the SEC. Other unknown or unpredictable factors that could also adversely affect our business, financial condition and results of operations may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in this release may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of our management as of the date of this press release. Except as required by applicable laws, ILG does not undertake to update these forward-looking statements.
To view the financial tables accompanying this release, go to http://www.iilg.com/phoenix.zhtml?c=223490&p=irol-newsArticle&ID=1423769&highlight=
Interval Leisure Group
Jennifer Klein, Investor Relations, 305-925-7302
Christine Boesch, Corporate Communications, 305-925-7267
SOURCE: Interval Leisure Group