Adjusted Diluted EPS Growth of 10%
Raises Full Year EPS Guidance
PARSIPPANY, N.J. - April 24, 2014 // PRNewswire // - Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended March 31, 2014.
"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 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.
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.
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.
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.
Other Items
Balance Sheet Information as of March 31, 2014:
A schedule of debt is included in Table 5 of this press release.
Note to Editors: 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:
Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company's results, outlook and guidance on Thursday, April 24, 2014 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 24, 2014. The conference call may also be accessed by dialing 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 24, 2014, at 800-944-8789.
The Company will post guidance information on its website following the conference call.
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.
One of the world's largest hospitality companies, Wyndham Worldwide (NYSE: WYN) provides a wide range of hospitality products and services 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 approximately 7,500 franchised hotels and 646,900 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 107,000 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 over 190 vacation ownership resorts serving approximately 907,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs approximately 32,800 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 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 14, 2014. 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.
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SOURCE Wyndham Worldwide Corporation
Wyndham Hotels & Resorts (NYSE: WH) is a hotel franchising company.