ORLANDO, FL (May 13, 2010) — Ultimate Escapes, Inc. (OTCBB: ULEI and ULEI-W) (the “Company”), one of the world’s largest luxury destination clubs, yesterday announced its 2010 first quarter financial results. For the first quarter of 2010, the Company reported net loss of $6.5 million, compared to a net loss of $1.2 million in the prior-year quarter. The increase in net loss was principally driven by a decrease in revenue due to a one-time assessment program in the first quarter of 2009 that was not repeated in 2010, and an increase in operating expenses due to the Private Escapes transaction in September 2009.
“In the first quarter, membership fee revenue increased 66%, other revenues increased 63% and annual dues revenue increased 17%, a direct result of a larger membership base paying annual dues and fees at the end of the first quarter,” said President and Chief Executive Officer Jim Tousignant. “Further, we paid our debt down by $3.2 million in the quarter, showing our continued committed to improving our balance sheet and increasing our fiscal health.”
First Quarter 2010 Results
For first quarter 2010, the Company reported revenue of $7.3 million, a 15% decrease from $8.6 million in the prior-year quarter, primarily due to $3.0 million in member assessment fees earned in the first quarter of 2009 that were not repeated in the current year, partially offset by increased revenues from new members added as a result of the Private Escapes transaction. Excluding assessment fees, first quarter 2010 revenue was up 31% from the prior-year quarter.
EBITDA for first quarter 2010 was ($1.2) million, compared with $2.3 million from the prior-year quarter. Depreciation and amortization expense for the first quarter 2010 was $2.0 million, up 90% from $1.0 million in the prior-year quarter as a result of the Private Escapes transaction. Interest expense for the first quarter 2010 was $3.0 million, a 31% increase from $2.3 million in the prior-year quarter as a result of the Private Escapes transaction.
Net loss for the first quarter 2010 was $6.5 million, compared to a net loss of $1.2 million in the prior-year quarter.
For a reconciliation of EBITDA to the most similar GAAP measure, see “Unaudited Operating Results using Adjusted GAAP Revenue Recognition and Adjusted EBITDA (in thousands)” below.
Liquidity and Capital Resources
As of March 31, 2010, that Company had $4.7 million in cash and restricted cash and approximately $120.1 million of debt outstanding on its balance sheet.
Conference Call Information
The Company will host a conference call and webcast today at 4:30 PM EDT. Both the call and webcast are open to the general public.
The conference call number is 888-466-4587; please call ten minutes in advance to ensure that you are connected prior to the presentation. Interested parties may also access the live call on the Internet at http://www.ultimateescapes.com (select Investor Relations and then Events and Presentations). Please log-on fifteen minutes in advance to ensure that you are connected. Questions and answers will be reserved for call-in analysts and investors. A replay of the call will be available two hours following the end of the call through midnight EDT on Thursday, May 20 at www.ultimateescapes.com and by telephone at (888) 203-1112; passcode 1064200.
Unaudited Operating Results using Adjusted GAAP Revenue Recognition and Adjusted EBITDA (in thousands)
The Company uses an adjusted revenue calculation as an integral part of its internal financial management reporting and planning process, based on adjusted GAAP revenue recognition. For this purpose, the non-refundable club membership initiation fee is recognized over the first 18 months of membership, with the remaining club membership fee amortized over ten years, rather than the full amount of the club membership fee (including the non-refundable portion) being recognized over the ten-year expected life of the club membership, as is reflected in our consolidated financial statements. Club members cannot resign within the first 18 months of membership. Because the club member initiation fee is non-refundable, we believe that treating such non-refundable initiation fee as earned over that 18 month minimum membership contract period better reflects the current performance of our business and the actual contractual terms of our club membership plan.
We also measure performance based on Adjusted EBITDA, which is the metric used to determine certain earn out units as provided at the closing of the business combination with Secure America. Adjusted EBITDA with respect to any period, means, as determined in accordance with GAAP, the difference between our revenues (plus the non-refundable portion of membership fees to the extent such membership fees are not included in revenue pursuant to GAAP) and our expenses, on a consolidated basis for such period, plus the sum of (i) interest expense, (ii) income tax expense, (iii) depreciation expense and (iv) amortization expense but (v) excluding all non-cash compensation related to our 2009 Stock Option Plan and our previous employee stock-based compensation plan.
About Ultimate Escapes(R)
Founded in 2004, Ultimate Escapes is the largest luxury destination club as measured by number of club destinations, and the second-largest destination club as measured by number of members. Ultimate Escapes offers club members flexible access to a growing collection of hundreds of multi-million dollar private residences and luxury hotels in more than 150 global club and affiliate destinations. Locations range from chic urban apartments to charming beach cottages, spacious five-bedroom homes to an 80-foot private yacht. Each trip is coordinated by experienced, knowledgeable staff, trained to handle every vacation detail. Additional information about Ultimate Escapes and its club and membership offerings can be found at www.ultimateescapes.com
Forward Looking Statements
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and Ultimate Escapes. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “hopes,” “estimates,” and variations of such words and similar expressions are intended to identify forward-looking statements. Although Ultimate Escapes believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates, which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of Ultimate Escapes. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, future operating or financial results; expectations regarding the strength of the future growth of the luxury destination club industry; future acquisitions, business strategy and expected capital spending; general market conditions and industry trends; risks associated with operations outside the United States; and other factors listed from time to time in Ultimate Escapes’ filings with the Securities and Exchange Commission at http://www.sec.gov. Ultimate Escapes expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Ultimate Escapes’ expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
To view the financial tables accompanying this release, go to http://ir.ultimateescapes.com/releasedetail.cfm?ReleaseID=469588
SOURCE: Ultimate Escapes, Inc.