Wyndham Worldwide Reports First Quarter 2013 Earnings First Quarter Adjusted EPS Up 18% Year-Over-Year
PARSIPPANY, N.J., April 24, 2013 /PRNewswire/ -- Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended March 31, 2013.
- First quarter adjusted diluted earnings per share (EPS) was $0.71, compared with $0.60 in the first quarter of 2012, an increase of 18%. First quarter reported diluted EPS was $0.19, compared with $0.21 from the same period in 2012.
- First quarter adjusted net income increased by 9% to $98 million.
- During the quarter, the Company repurchased 2.4 million shares of its common stock for $140 million.
"We're off to a great start this year, with an 18% increase in adjusted earnings per share," said Stephen P. Holmes, chairman and CEO. "Our operating momentum is strong and our capital allocation philosophy is disciplined. This winning combination will continue to enhance our growth and shareholder value, this year and in years to come."
FIRST QUARTER 2013 OPERATING RESULTS
First quarter revenues were $1.1 billion, an increase of 9% from the prior year period. The increase reflects growth across all of the Company's businesses, primarily in the Lodging and Vacation Ownership businesses.
For the first quarter of 2013, adjusted net income was $98 million, or $0.71 per diluted share, compared with $90 million, or $0.60 per diluted share for the same period in 2012. The increase in adjusted net income reflects stronger operating results primarily in our Lodging and Vacation Ownership businesses. EPS also benefited from the Company's share repurchase program, which decreased weighted average share count by 7% year-over-year.
Reported net income for the first quarter of 2013 was $27 million, or $0.19 per diluted share, compared with $32 million, or $0.21 per diluted share, for the first quarter of 2012. Reported net income included several items that are excluded from adjusted net income. The net effect of these items reduced first quarter 2013 net income by $71 million and reduced first quarter 2012 net income by $58 million, both primarily related to the early extinguishment of debt. Full reconciliations of adjusted results to GAAP results appear in Table 8 of this press release.
Free cash flow was $233 million for the three months ended March 31, 2013, compared with $195 million for the same period in 2012, a 19% increase. The growth of free cash flow largely reflects favorable working capital utilization. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. For the three months ended March 31, 2013, net cash provided by operating activities was $274 million, compared with $228 million in the prior year period.
BUSINESS UNIT RESULTS
Lodging (Wyndham Hotel Group)
Revenues were $222 million and EBITDA was $58 million in the first quarter of 2013, an increase of 20% and 18%, respectively, compared with the first quarter of 2012. Results reflect RevPAR gains, a larger system size and revenues associated with the Wyndham Rio Mar in Puerto Rico, which became a Company-owned hotel in the fourth quarter of 2012. Revenues also included increased hotel management reimbursable fees, which are EBITDA-neutral.
Domestic RevPAR increased 6% compared with the first quarter of 2012. Total system-wide RevPAR increased 4%, reflecting proportionally greater growth of lower RevPAR hotels in China.
As of March 31, 2013, the Company's hotel system consisted of approximately 7,380 properties and over 631,800 rooms, a 4% room increase compared with the first quarter of 2012. The development pipeline included 950 hotels and approximately 110,000 rooms, of which 55% were international and 59% were new construction.
Vacation Exchange and Rentals (Wyndham Exchange & Rentals)
Revenues were $374 million in the first quarter of 2013, a 4% increase over the first quarter of 2012. In constant currency and excluding the impact of acquisitions, revenues increased 1%.
Exchange revenues were $193 million, an increase of 3% compared with the first quarter of 2012. Exchange revenue per member increased 3%, while the average number of members remained flat.
Vacation rental revenues were $166 million, a 4% increase compared with the first quarter of 2012. Excluding acquisitions, vacation rental revenues were flat, reflecting a 6% increase in the average net price per vacation rental offset by a 5% decrease in transaction volume.
Adjusted EBITDA for the first quarter of 2013 was $94 million, a 1% increase over the first quarter of 2012.
Vacation Ownership (Wyndham Vacation Ownership)
Revenues were $549 million in the first quarter of 2013, a 10% increase over the first quarter of 2012. Excluding the acquisition of Shell Vacations Club, revenues increased by 2%.
Gross VOI sales were $384 million in the first quarter of 2013, unchanged from the first quarter of 2012, primarily reflecting a 10% increase in tour flow offset by an 8% decrease in volume per guest.
Adjusted EBITDA for the first quarter of 2013 was $113 million, a 10% increase compared with the first quarter of 2012. The increase was primarily due to the favorable resolution of a lawsuit and the Shell acquisition.
- The Company repurchased 2.4 million shares of common stock for $140 million during the first quarter of 2013. From April 1 through April 23, 2013, the Company repurchased an additional 620,000 shares for $39 million. The Company has $328 million remaining on its current share repurchase authorization.
- Net interest expense in the first quarter of 2013 was $30 million, compared with $31 million in the first quarter of 2012.
Balance Sheet Information as of March 31, 2013:
- Cash and cash equivalents of $217 million, compared with $195 million at December 31, 2012
- Vacation ownership contract receivables, net, of $2.8 billion, compared with $2.9 billion at December 31, 2012
- Vacation ownership and other inventory of $1.1 billion, unchanged from December 31, 2012
- Securitized vacation ownership debt of $2.0 billion, unchanged from December 31, 2012
- Long-term debt of $3.0 billion, compared with $2.6 billion at December 31, 2012. The remaining borrowing capacity on the revolving credit facility, net of commercial paper borrowings, was $753 million as of March 31, 2013, compared with $631 million as of December 31, 2012
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 2013, the Company expects:
- Revenues of approximately $4.925 - $5.100 billion
- Adjusted EBITDA of approximately $1.140 - $1.165 billion
- Adjusted EPS of approximately $3.60 - $3.70 based on a diluted share count of 138 million.
The guidance reflects assumptions used for internal planning purposes. Guidance may exclude non-recurring or special items, which may have a positive or negative impact on reported results. If economic conditions change materially from current levels, the Company's assumptions and guidance may change materially.
Conference Call Information
Wyndham Worldwide Corporation will hold a conference call with investors to discuss this news on Wednesday, April 24, 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 April 24, 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 April 24, 2013, at 800-873-8284.
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 assessment of 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 EBITDA and EPS to the most directly comparable GAAP measure 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 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 7,380 franchised hotels and over 631,800 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.