PARSIPPANY, N.J. - Oct. 27, 2015 // PRNewswire // - Wyndham Worldwide Corporation (NYSE:WYN) today announced results for the three months ended September 30, 2015.
Third Quarter Highlights:
"We delivered great results in the third quarter across all our businesses, with more guests, staying more often, and more engaged than ever," said Stephen P. Holmes, chairman and CEO. "This quarter was highlighted by a double digit increase in gross vacation ownership interest sales, strong growth in vacation rental transaction volume, and increased activity through our re-invigorated loyalty program. We are connecting the widest range of guests around the globe with the accommodation options they desire."
Third quarter revenues were $1.6 billion, an increase of 3% from the prior year period. Excluding acquisitions and a divestiture, constant currency revenues increased 6% reflecting growth in each of the Company's business segments.
Third quarter adjusted EBITDA was $412 million, compared with $418 million in the prior year period. Year-over-year adjusted EBITDA comparisons were adversely affected by foreign currency effects of $17 million in 2015, and the absence of results in 2015 from Canvas Holiday, a U.K.-based camping business, which contributed $18 million of EBITDA in the third quarter 2014 and was divested in the fourth quarter of 2014. Excluding these items and acquisitions, adjusted EBITDA increased 7%.
Adjusted net income was $210 million, or $1.78 per diluted share, compared with $210 million, or $1.67 per diluted share for the same period in 2014. Net income and earnings per share benefited from strong operations, but were negatively affected by the same factors that influenced adjusted EBITDA comparisons, noted above. EPS also benefited from the Company's share repurchase program, which decreased the weighted average diluted share count 6% year-over-year.
Reported net income for the third quarter of 2015 was $190 million, or $1.61 per diluted share, compared with $206 million, or $1.64 per diluted share, for the third 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 third quarter 2015 net income by $20 million and unfavorably impacted third quarter 2014 net income by $4 million. Full reconciliations of adjusted net income to GAAP results appear in Table 8 of this press release. Year-over-year reported net income third quarter comparisons were negatively impacted by the same factors that influenced adjusted EBITDA comparisons, noted above.
Free cash flow was $660 million for the nine months ended September 30, 2015, compared with $750 million for the same period in 2014. The decline in free cash flow reflects the timing of capital expenditures and working capital, including inventory spending. The Company expects inventory spending in the fourth quarter of 2015 to be significantly lower than in the fourth quarter of 2014. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. For the nine months ended September 30, 2015, net cash provided by operating activities was $817 million, compared with $899 million in the prior year period.
Revenues were $357 million in the third quarter of 2015, a 13% increase compared with the third quarter 2014. Adjusted EBITDA was $108 million, flat compared with the same period in 2014.
In constant currency and excluding acquisitions, revenues increased 4% and adjusted EBITDA increased 3%, reflecting domestic RevPAR growth, which was partially offset by increased marketing expenditures and higher costs related to the implementation of new property management and central reservation systems.
Domestic RevPAR increased 5.2%. In constant currency, total system-wide RevPAR increased 3.3%.
As of September 30, 2015, the Company's hotel system consisted of approximately 7,760 properties and 672,000 rooms, a 2.5% room increase compared with the third quarter of 2014. The development pipeline included 910 hotels and over 122,800 rooms, of which 61% were international and 68% were new construction.
Revenues were $476 million in the third quarter of 2015, a 7% decline compared with the third quarter of 2014. In constant currency, and excluding acquisitions and the impact of the divestiture of Canvas Holidays in 2014, revenues increased 6%.
Exchange revenues were $157 million, down 3% compared with the third quarter of 2014. In constant currency, exchange revenues were up 1% compared with the prior year, as the average number of members increased 1.5% while exchange revenue per member was flat.
Vacation rental revenues were $296 million, an 11% decrease compared with the third quarter of 2014. In constant currency and excluding the impact of acquisitions and the divestiture, vacation rental revenues were up 8%, reflecting a 5.8% increase in transaction volume and a 1.7% increase in average net price per vacation rental.
Adjusted EBITDA for the third quarter of 2015 was $137 million, a 14% decrease compared with the third quarter of 2014. On a currency neutral basis and excluding the impact of acquisitions and the divestiture, adjusted EBITDA increased 5% compared with the prior year period.
Revenues were $750 million in the third quarter of 2015, a 7% increase over the third quarter of 2014. In constant currency, revenues increased 8%.
Gross VOI sales were $565 million in the third quarter of 2015, an increase of 10% compared with the third quarter of 2014. In constant currency, Gross VOI sales increased 12%. Volume per guest (VPG) for the quarter increased 10.6% in constant currency while tour flow increased 0.9%. VPG increases were driven primarily by a higher average transaction size.
Adjusted EBITDA for the third quarter of 2015 was $201 million, an increase of 7% compared with the third quarter of 2014. Results primarily reflect higher VPG. On a currency neutral basis adjusted EBITDA increased 9%.
Balance Sheet Information as of September 30, 2015:
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 2015, the Company provides the following guidance:
"We were pleased with our performance across the Company in the third quarter, but we're even more excited by what lies ahead. We have the broadest range of lodging accommodations in the world – including hotels, timeshare and rentals – spanning luxury to budget. We are uniquely positioned to satisfy the burgeoning travel demand around the globe. In 2016, we expect organic adjusted EBITDA growth consistent with our long-term target range of 6 – 8%," said Mr. Holmes.
Wyndham Worldwide Corporation will hold a conference call with investors to discuss the Company's results, outlook and guidance on Tuesday, October 27, 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 October 27, 2015. 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 27, 2015, at 800-388-4923.
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 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 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 approximately 7,760 franchised hotels and approximately 672,000 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 110,000 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 210 vacation ownership resorts serving approximately 900,000 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.
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SOURCE Wyndham Worldwide Corporation
Margo C. Happer
Senior Vice President
Wyndham Worldwide Corporation
Wyndham Worldwide Corporation