October 24, 2013 // Franchising.com // PARSIPPANY, N.J. – Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended September 30, 2013.
"Results for the quarter were excellent, with adjusted EPS growth of 25% and strong performance in each of our business units," said Stephen P. Holmes, chairman and CEO. "Wyndham Hotel Group continues to expand its international footprint, Wyndham Exchange & Rentals is benefiting from recent innovations, and Wyndham Vacation Ownership continues to transform the business to an asset-light model. Overall, we have great momentum across the company, which when combined with our disciplined capital allocation strategy, will continue to create value for shareholders."
Adjusted net income was $187 million, or $1.41 per diluted share, compared with $162 million, or $1.13 per diluted share for the same period in 2012. The increases in revenues and adjusted net income reflect stronger operating results across all of the Company’s businesses. EPS also benefited from the Company’s share repurchase program, which decreased weighted average diluted share count by 7% year-over-year.
Reported net income for the third quarter of 2013 was $187 million, or $1.40 per diluted share, compared with $159 million, or $1.11 per diluted share, for the third quarter of 2012. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.
Free cash flow was $705 million for the nine months ended September 30, 2013, compared with $685 million for the same period in 2012, a 3% increase. The growth of free cash flow largely reflects stronger operating performance partially offset by higher capital expenditures. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. For the nine months ended September 30, 2013, net cash provided by operating activities was $858 million, compared with $808 million in the prior year period.
Revenues were $297 million in the third quarter of 2013, a 19% increase over the third quarter of 2012. The increase reflects higher revenues from owned hotels, hotel franchise fees and management reimbursable fees as well as incremental global conference fees.
Domestic RevPAR increased 5.2% compared with the third quarter of 2012. Total system-wide RevPAR increased 3.4%, reflecting proportionally higher growth of lower RevPAR hotels in China.
EBITDA for the third quarter of 2013 was $95 million, a 10% increase compared with the third quarter of 2012. The increase was primarily due to higher RevPAR and the favorable timing of marketing expenditures.
As of September 30, 2013, the Company’s hotel system consisted of approximately 7,440 properties and over 638,300 rooms, a 3.3% room increase compared with the third quarter of 2012. The development pipeline included over 900 hotels and approximately 114,000 rooms, of which 60% were international and 66% were new construction.
Revenues were $470 million in the third quarter of 2013, a 12% increase over the third quarter of 2012. In constant currency and excluding the impact of acquisitions, revenues increased 7%.
Exchange revenues were $158 million, flat compared with the third quarter of 2012. In constant currency, exchange revenues were up 1%, as the average number of members increased 1.0% and exchange revenue per member increased 0.4%.
Vacation rental revenues were $293 million, an 18% increase compared with the third quarter of 2012. In constant currency and excluding acquisitions, vacation rental revenues were up 10%, reflecting a 6.7% increase in the average net price per vacation rental and a 3.1% increase in transaction volume. Results benefited from an improved pricing strategy and increased rental unit supply in Europe.
EBITDA for the third quarter of 2013 was $141 million, a 15% increase over the third quarter of 2012. Excluding the impact of acquisitions and foreign currency, EBITDA increased 6%.
Revenues were $677 million in the third quarter of 2013, an 11% increase over the third quarter of 2012. Excluding the impact of the Shell Vacations Club acquisition, revenues increased 6%, primarily reflecting higher gross VOI sales.
Gross VOI sales were $536 million in the third quarter of 2013, an increase of 7% over the third quarter of 2012, primarily reflecting an 8.7% increase in tour flow offset by a 1.6% decrease in volume per guest. Excluding Shell Vacations Club, volume per guest was flat.
Adjusted EBITDA for the third quarter of 2013 was $176 million, a 14% increase compared with the third quarter of 2012. Excluding the impact of the Shell Vacations Club acquisition, adjusted EBITDA increased 8%, primarily due to the revenue increases and a lower loan loss provision.
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.
Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, October 23, 2013 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 at the website for approximately 90 days beginning at noon EDT on October 23, 2013. 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 October 23, 2013, at 866-454-2130.
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.
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 over 7,440 franchised hotels and over 638,300 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 106,000 vacation properties in 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 190 vacation ownership resorts serving approximately 915,000 owners throughout the United States, Canada, Mexico, the Caribbean, and the South Pacific. Based in Parsippany, NJ, Wyndham Worldwide employs approximately 32,500 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 15, 2013. 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.
To see the full report please go to: http://www.wyndhamworldwide.com/investors/press-releases
Margo C. Happer
Senior Vice President, Investor Relations
Wyndham Worldwide Corporation
Vice President, Investor Relations
Wyndham Worldwide Corporation