PARSIPPANY, NJ (April 29, 2015) — Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended March 31, 2015.
First Quarter Highlights:
• First quarter adjusted diluted earnings per share (EPS) was $1.03, an increase of 32% from adjusted diluted EPS of $0.78 in the first quarter of 2014. Reported diluted EPS was $1.00 in the first quarter of 2015, an increase of 45% from reported diluted EPS of $0.69 from the same period in 2014.
• Revenues increased 6% compared with the first quarter of 2014. In constant currency, revenues increased 9%.
• Adjusted EBITDA increased 14% compared with the first quarter of 2014. In constant currency, adjusted EBITDA increased 18%.
• During the quarter, the Company repurchased 1.7 million shares of its common stock for $150 million.
“We are off to a strong start this year. Despite significant currency headwinds, adjusted diluted EPS increased 32% and adjusted EBITDA increased 14% in the first quarter,” said Stephen P. Holmes, chairman and CEO. “All three businesses once again performed well, highlighted by strong domestic RevPAR growth at our Hotel Group, improved provision and cost of sales at Vacation Ownership and strong growth across our vacation rentals businesses. We continue to deliver strong results, allocate capital to both invest in the business and return to shareholders, and innovate to build a strong competitive position going forward.”
FIRST QUARTER 2015 OPERATING RESULTS
First quarter revenues were $1.3 billion, an increase of 6% from the prior year period. In constant currency revenues increased 9%, reflecting growth across the Company’s business segments.
Adjusted net income was $126 million, or $1.03 per diluted share, compared with $102 million, or $0.78 per diluted share for the same period in 2014. The increase reflects stronger financial results in all of the Company’s businesses. EPS also benefited from the Company’s share repurchase program, which decreased weighted average diluted share count by 6% year-over-year.
Reported net income for the first quarter of 2015 was $122 million, or $1.00 per diluted share, compared with $90 million, or $0.69 per diluted share, for the first quarter of 2014. Reported net income in both periods reflects several items excluded from adjusted net income. The net result of these items unfavorably impacted first quarter 2015 net income by $4 million and unfavorably impacted first quarter 2014 net income by $12 million. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.
Free cash flow was $197 million for the three months ended March 31, 2015, compared with $269 million for the same period in 2014. The decline in free cash flow reflects the timing of working capital including inventory spending. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. For the three months ended March 31, 2015, net cash provided by operating activities was $253 million, compared with $315 million in the prior year period. The Company expects free cash flow for the full year 2015 of approximately $800 million compared with $749 million in free cash flow in 2014.
BUSINESS UNIT RESULTS
Lodging (Wyndham Hotel Group)
Revenues were $292 million in the first quarter of 2015, a 23% increase over the first quarter of 2014. Excluding an acquisition and in constant currency, revenues increased 14%, reflecting higher domestic RevPAR and worldwide room growth as well as incremental global conference fees.
Total system-wide RevPAR increased 1.7% compared with the first quarter of 2014. Domestic RevPAR increased 7.7%, but was partially offset by a 9.8% decline in international RevPAR. In constant currency and excluding acquisitions, total system-wide RevPAR increased 4.0%.
Adjusted EBITDA for the first quarter of 2015 was $79 million, a 16% increase compared with the first quarter of 2014. The increase primarily reflects higher domestic RevPAR and worldwide room growth as well as higher inter-segment licensing fees for use of the Wyndham brand trade name.
As of March 31, 2015, the Company’s hotel system consisted of over 7,670 properties and over 667,000 rooms, a 3.2% room increase compared with the first quarter of 2014. The development pipeline included 925 hotels and approximately 116,000 rooms, of which 58% were international and 62% were new construction.
Vacation Exchange and Rentals (Wyndham Exchange & Rentals)
Revenues were $369 million in the first quarter of 2015, a 3% decrease over the first quarter of 2014. In constant currency, revenues increased 5%.
Exchange revenues were $185 million, a 1% decrease compared with the first quarter of 2014. In constant currency, exchange revenues increased 2%, as the average number of members increased 2.5% and exchange revenue per member was flat.
Vacation rental revenues were $166 million, a 6% decrease compared to the first quarter of 2014. In constant currency, vacation rental revenues were up 8%, reflecting a 7.0% increase in transaction volume and a 0.9% increase in average net price per vacation rental.
Adjusted EBITDA for the first quarter of 2015 was $104 million, a 9% increase compared with the first quarter of 2014. On a currency-neutral basis and excluding the divestiture of a business, adjusted EBITDA increased 9% compared with the prior year period primarily reflecting higher revenue and a $4 million reserve reversal resulting from a favorable ruling associated with value-added taxes.
Vacation Ownership (Wyndham Vacation Ownership)
Revenues were $617 million in the first quarter of 2015, a 4% increase over the first quarter of 2014.
Net VOI sales increased 11%, primarily reflecting a lower loan loss provision and the recognition of deferred revenues. Gross VOI sales were $390 million in the first quarter of 2015, a decrease of 5% compared with the first quarter of 2014, reflecting a 4.2% decline in volume per guest (VPG) and a 1.2% decline in tour flow. In constant currency, VPG declined 3.1% primarily reflecting a higher mix of new owner tours, which generally have a lower VPG than tours to existing owners.
Adjusted EBITDA for the first quarter of 2015 was $130 million, an increase of 13% compared with the first quarter of 2014, primarily reflecting the net revenue increase and lower cost of sales.
• The Company repurchased 1.7 million shares of common stock for $150 million during the first quarter of 2015. From April 1 through April 27, 2015, the Company repurchased an additional 0.5 million shares for $45 million. The Company’s remaining share repurchase authorization totals $821 million as of April 27, 2015.
• Reported net interest expense in the first quarter of 2015 was $23 million, compared with $25 million in the first quarter of 2014.
Balance Sheet Information as of March 31, 2015:
• Cash and cash equivalents of $180 million, compared with $183 million at December 31, 2014
• Vacation ownership contract receivables, net, of $2.6 billion, compared with $2.7 billion at December 31, 2014
• Vacation ownership and other inventory of $1.2 billion, unchanged from December 31, 2014
• Securitized vacation ownership debt of $2.2 billion, unchanged from December 31, 2014
• Long-term debt of $3.0 billion, compared with $2.9 billion at December 31, 2014. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $1.1 billion as of March 31, 2015, compared to $1.3 billion from December 31, 2014
A schedule of debt is included in Table 5 of this press release.
Note: 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 2015, the Company reiterates the following guidance:
• Revenues of approximately $5.450 – $5.550 billion.
• Adjusted EBITDA of approximately $1.285 – $1.315 billion. Guidance reflects a $42 million adverse impact from foreign exchange compared with 2014 full year results.
For the full year 2015, the Company updates the following guidance:
• Adjusted diluted EPS of approximately $4.81 – $4.96 based on a diluted share count of 121.4 million, up from $4.75 – $4.90 based on a diluted share count of 123 million.
Conference Call Information
Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company’s results, outlook and guidance on Tuesday, April 28, 2015 at 8:30 a.m. EDT. Listeners may access the webcast live through the Company’s website at www.wyndhamworldwide.com/investors. An archive of this webcast will be available on the website for approximately 90 days beginning at noon EDT on April 28, 2015. The conference call may also be accessed by dialing 800-369-2125Call: 800-369-2125 and providing the passcode “WYNDHAM.” Listeners are urged to call at least 10 minutes prior to the scheduled start time. A telephone replay will be available for approximately 90 days beginning at noon EDT on April 28, 2015, at 800-388-4923Call: 800-388-4923.
The Company will post guidance information on its website following the conference call.
Presentation of Financial Information
Financial information discussed in this press release includes non-GAAP measures, which include or exclude certain items. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons and are helpful to investors as an additional tool for further understanding and assessing the Company’s ongoing core operating performance. Exclusion of items in our non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. A complete reconciliation of reported GAAP results to the comparable non-GAAP information appears in the financial tables section of the press release. It is not practicable to provide a reconciliation of forecasted adjusted EBITDA and adjusted EPS to the most directly comparable GAAP measures because certain items cannot be reasonably estimated or predicted at this time. Any such items could be significant to the Company’s reported results.
About Wyndham Worldwide Corporation
One of the world’s largest hospitality companies, Wyndham Worldwide (NYSE: WYN) provides a wide range of hospitality services and products through its global portfolio of world-renowned brands. The world’s largest hotel company based on the number of properties, Wyndham Hotel Group is home to many of the world’s best-known hotel brands, with over 7,670 franchised hotels and over 667,000 hotel rooms worldwide. Wyndham Exchange & Rentals is the worldwide leader in vacation exchange and the world’s largest professionally managed vacation rentals business, providing more than 5 million leisure-bound families annually with access to over 109,000 vacation properties in over 100 countries through its prominent exchange and vacation rental brands. The industry and timeshare ownership market leader, Wyndham Vacation Ownership develops, markets, and sells vacation ownership interests and provides consumer financing to owners through its network of 210 vacation ownership resorts serving approximately 904,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs over 34,000 associates globally. For more information, please visit www.wyndhamworldwide.com.
This press release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, conveying management’s expectations as to the future based on plans, estimates and projections at the time the Company makes the statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The forward-looking statements contained in this press release include statements related to the Company’s revenues, earnings, cash flow and related financial and operating measures.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Factors that could cause actual results to differ materially from those in the forward-looking statements include general economic conditions, the performance of the financial and credit markets, the economic environment for the hospitality industry, the impact of war, terrorist activity or political strife, operating risks associated with the hotel, vacation exchange and rentals and vacation ownership businesses, as well as those described in the Company’s Annual Report on Form 10-K, filed with the SEC on February 13, 2015. Except for the Company’s ongoing obligations to disclose material information under the federal securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.
PRESS RELEASE SOURCE: Wyndham Worldwide
Investor and Media contact:
Margo C. Happer
Senior Vice President, Investor Relations
Wyndham Worldwide Corporation
(973) 753-6472Call: (973) 753-6472
Vice President, Investor Relations
Wyndham Worldwide Corporation
(973) 753-7703Call: (973) 753-7703