Press Release: Wyndham International, Inc.
May 7, 2002
DALLAS, TX -- Wyndham International, Inc. (NYSE:WYN) yesterday reported results for the first quarter ended Mar.
31, 2002.
Business Performance
On a pro forma basis, which reflects adjustments for acquisitions and dispositions, earnings before interest, taxes,
depreciation and amortization (EBITDA), as adjusted, was $114.3 million for the three months ending Mar. 31, 2002,
versus $172.3 million for the same period in 2001 and an increase from the original guidance, $100.0 million to
$105.0 million, based on strong operating margins and returning demand. Total company comparable owned and leased
revenue per available room (RevPAR) declined 16.9 percent versus the same period in 2001. This decline was comprised
of a 10.4 percent decline in average daily rate, created by the change in market segmentation mix, and a five percentage
point decline in occupancy. Wyndham Hotels & Resorts out performed the total company portfolio for the quarter,
with a RevPAR decline of 13.9 percent from the prior year composed of a 9.5 percent decline in average daily rate
and a three-percentage point drop in occupancy.
Importantly, occupancy grew each month in the first quarter indicating the return in demand. Specifically, Wyndham-branded
comparable owned and leased monthly occupancy was 59.5 percent, 69.2 percent and 72.5 percent for January, February
and March, respectively. Total occupancy for first quarter 2002 on Wyndham-branded comparable owned and leased
properties was 67.0 percent compared to an occupancy of 58.8 percent in fourth quarter 2001 and 70.9 percent for
first quarter 2001. A further indication of Wyndham's vitality is the consecutive monthly gain in market share
experienced in the first quarter for owned, leased, managed and franchised hotels within their competitive sets.
Accordingly, Wyndham's RevPAR penetration index improved 20 basis points from the same period the prior year.
Operating margins improved for the quarter; total company comparable owned and leased properties increased their
operating margins by 540 basis points versus the fourth quarter 2001. Further, Wyndham-branded comparable owned
and leased properties increased their operating margins by 730 basis points over the fourth quarter 2001. During
first quarter 2002, the increase in operating margins led to the two-to-one ratio with respect to the change in
EBITDA versus the change in RevPAR.
"We are proud of the first quarter results and especially in our ability to operate efficiently and deliver
better than anticipated margins," stated Wyndham International Chairman and Chief Executive Officer Fred J.
Kleisner. "We believe that the first quarter results are indicative of a growing demand and return for both
the industry and Wyndham."
Business Outlook
The company anticipates the monthly improvement in demand from the first quarter to continue. For the second quarter
2002, RevPAR is expected be a 5.0 to 8.0 percent decline over the same period the prior year. EBITDA projections
for the second quarter 2002 are from $122.0 million to $127.0 million. While cautiously optimistic about the future
business, given the changing dynamics of the market, Wyndham has not increased guidance for the full year, but
will provide revisions to the guidance on a quarterly basis.
As the industry momentum continues, the independent business traveler, who typically pays higher rates for their
hotel stays, will drive an increase in average daily rates and RevPAR. As a result, Wyndham will become even more
aggressive to capture this premium business. Wyndham ByRequest(SM), the brand's guest recognition program, was
created directly from consumer feedback to uniquely deliver the most personalized guest stay. Building upon the
program's success, Wyndham will announce a major enhancement to ByRequest that has a relevant and immediate benefit
to the business traveler. This will further differentiate Wyndham, with its focus on the guest experience to drive
preference, from its competitors with their focus on points to build loyalty.
Strategic Plan
Wyndham remains committed to its business plan focused on growing the Wyndham brand and the disposition of non-strategic
assets. Since its implementation in June 1999, 83 assets have sold for gross proceeds of approximately $903 million.
There are 56 non-strategic assets remaining to be sold, and the company has stated it will continue to hold these
assets until lodging fundamentals return and values increase. Additionally, Wyndham entered into options to sell
four parcels of vacant land adjacent to premier properties to develop high-end residential units. This transaction
would allow non-EBITDA producing assets to deliver a long-term income stream through a carried interest in the
venture's profits and management of the units.
Credit Amendment
On May 3, Wyndham International amended its credit facilities to allow for the issuance of debt securities. This
underscores, once again, the confidence that the banking syndicate has in the Wyndham International management
team, as evidenced earlier in the year with the permanent amendment to the senior credit facilities approved in
January 2002.
Wyndham International, Inc. offers upscale and luxury hotel and resort accommodations through proprietary lodging
brands and a management services division. Based in Dallas, Wyndham owns, leases, manages and franchises hotels
and resorts in the United States, Canada, Mexico, the Caribbean and Europe. For more information, visit www.wyndham.com.
For reservations, call 800-Wyndham.
Cautionary Statement
This press release contains certain forward-looking statements within the meaning of Sections 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including projections about future operating
results. The Company's results could differ materially from those set forth in the forward-looking statements.
Certain factors that might cause a difference include, but are not limited to, risks associated with the availability
of equity or debt financing at terms and conditions favorable to Wyndham; risks associated with the course of litigation;
Wyndham's ability to effect sales of assets on favorable terms and conditions; Wyndham's ability to integrate acquisitions
into its operations and management; risks associated with the hotel industry and real estate markets in general;
competition within the lodging industry; the impact of general economic conditions; risks associated with debt
financing; and other risks and uncertainties set forth in the company's annual, quarterly and current reports and
proxy statements.
WYNDHAM INTERNATIONAL, INC.
2002 OPERATING STATISTICS BY QUARTER
Quarter Ended March 31,
-----------------------------
2002 2001 % Change
-------- -------- --------
COMPARABLE WYNDHAM BRANDED HOTELS (a)
Wyndham Hotels & Resorts
Average daily rate $135.59 $149.82 -9.5%
Occupancy 66.5% 69.9% -3.4 ppt
RevPAR $90.19 $104.69 -13.9%
Wyndham Luxury Resorts (b)
Average daily rate $276.24 $318.23 -13.2%
Occupancy 60.1% 61.1% -1.0 ppt
RevPAR $166.02 $194.57 -14.7%
Summerfield Suites by Wyndham
Average daily rate $105.53 $128.49 -17.9%
Occupancy 74.3% 78.2% -3.9 ppt
RevPAR $78.36 $100.39 -21.9%
Wyndham Garden
Average daily rate $82.49 $94.85 -13.0%
Occupancy 55.8% 63.9% -8.1 ppt
RevPAR $46.05 $60.60 -24.0%
COMPARABLE OWNED & LEASED HOTELS
Proprietary Branded (c)
Average daily rate $127.60 $145.02 -12.0%
Occupancy 67.0% 70.9% -3.9 ppt
RevPAR $85.47 $102.79 -16.8%
Non-Proprietary Branded (d)
Average daily rate $107.48 $116.27 -7.6%
Occupancy 59.9% 66.8% -6.9 ppt
RevPAR $64.36 $77.65 -17.1%
Total Portfolio
Average daily rate $120.37 $134.34 -10.4%
Occupancy 64.2% 69.3% -5.1 ppt
RevPAR $77.33 $93.10 -16.9%
NOTE: All hotel statistics exclude assets sold to date.
(a) Brand statistics are based on comparable owned, managed and leased
hotels for respective periods.
(b) Reflects results of the Boulders, Carmel Valley Ranch, the Lodge
at Ventana Canyon, and Isla Navidad.
(c) Reflects Wyndham Hotels & Resorts, Wyndham Luxury Resorts,
Summerfield Suites by Wyndham and Wyndham Garden Hotels that were
branded as of Jan. 1, 2001.
(d) Non-proprietary brand hotels owned by the Company as of Jan. 1,
2001.
WYNDHAM INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
Three Months Ended
March 31,
------------------------------------------
2002 2001 2002 2001
Comparable Comparable
Pro Forma Pro Forma Actual Actual
(1) (1)
--------- ---------- --------- ---------
Revenues:
Hotel revenues $492,983 $573,066 $ 492,983 $604,757
Management fees and service
fee income 4,470 4,862 4,470 5,719
Interest and other income 2,105 3,157 2,105 3,679
--------- ---------- --------- ---------
Total revenues 499,558 581,085 499,558 614,155
--------- ---------- --------- ---------
Expenses:
Hotel expenses 370,612 399,446 370,612 425,606
General and administrative
costs 15,040 7,738 15,040 7,738
Interest expense 64,417 83,951 64,417 86,256
--------- ---------- --------- ---------
Total operating costs and
expenses 450,069 491,135 450,069 519,600
--------- ---------- --------- ---------
Revenues net of direct
expenses 49,489 89,950 49,489 94,555
Non-recurring charges:
Professional fees and other 1,074 2,499 1,074 2,499
Abandoned transaction costs 1,118 202 1,118 202
Pre-opening and conversion
costs 752 660 752 660
Gain on derivative
instruments (1,334) (9,914) (1,334) (9,914)
Impairment of assets held
for sale 162 -- 162 --
(Gain) loss on sale of
assets 4,770 (336) 4,770 (336)
Write-off of management,
leasehold costs and
license agreements 1,005 -- 1,005 --
--------- ---------- --------- ---------
Total non-recurring
charges 7,547 (6,889) 7,547 (6,889)
--------- ---------- --------- ---------
Depreciation and
amortization 72,433 51,795 72,433 54,842
Equity in earnings from
unconsolidated subsidiaries (844) (381) (844) (381)
Minority interest in
consolidated subsidiaries 700 1,953 700 4,846
---------- ---------- ---------- ---------
72,289 53,367 72,289 59,307
---------- ---------- ---------- ---------
(Loss) income before income
taxes (30,347) 43,472 (30,347) 42,137
Provision (benefit) for
income taxes (11,272) 18,182 (11,272) 19,256
Accounting change, net of
applicable taxes 324,102 346,412 324,102 10,365
---------- ---------- ---------- ---------
Net (loss) income $(343,177) $(321,122) $(343,177) $12,516
========== ========== ========== =========
EBITDA, as adjusted $114,321 $172,277 $114,321 $177,746
========== ========== ========== =========
(1) The Comparable Pro Forma financial statements have been adjusted
to remove the operations of hotels sold and related interest
expense from corresponding retired debt and management contract
revenue from terminated management contracts.
WYNDHAM INTERNATIONAL, INC.
EBITDA Reconciliation
(in thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
------------------------------------------
2002 2001 2002 2001
Comparable Comparable
Pro Forma Pro Forma Actual Actual
--------- --------- --------- --------
EBITDA Reconciliation
Net (loss) income $(343,177) $(321,122) $(343,177) $12,516
Interest expense 64,417 83,951 64,417 86,256
Depreciation and
amortization 72,433 51,795 72,433 54,842
Provision (benefit) for
income taxes (11,272) 18,182 (11,272) 19,256
Cumulative effect of
accounting change 324,102 346,412 324,102 10,365
--------- --------- --------- --------
EBITDA 106,503 179,218 106,503 183,235
Interest, depreciation and
amortization from equity
interest in unconsolidated
subsidiaries 813 751 813 900
Interest, depreciation and
amortization attributable
to minority interests (1,429) (866) (1,429) 437
Professional fees and
other 1,074 2,499 1,074 2,499
Abandoned transaction
costs 1,118 202 1,118 202
Pre-opening and conversion
costs 752 660 752 660
Amortization of unearned
compensation 887 63 887 63
Loss on derivative
instruments (1,334) (9,914) (1,334) (9,914)
Impairment of assets held
for sale 162 -- 162 --
(Gain) loss on sale of
assets 4,770 (336) 4,770 (336)
Write-off of management,
leasehold costs and
license agreements 1,005 -- 1,005 --
--------- --------- --------- --------
EBITDA, as adjusted $114,321 $172,277 $114,321 $177,746
========= ========= ========= ========
Per Share Calculations:
Net (loss) income $(343,177) $(321,122) $(343,177) $12,516
Adjustment for preferred
stock (35,080) (27,025) (35,080) (27,025)
--------- --------- --------- --------
Net loss attributable to
common shareholders $(378,257) $(348,147) $(378,257) $(14,509)
========= ========= ========= ========
Basic and diluted loss per
common share:
Net loss before accounting
change $(0.32) $(0.01) $(0.32) $(0.03)
Cumulative effect of
change in accounting
principle, net of taxes (1.93) (2.07) (1.93) (0.06)
--------- --------- --------- --------
Net loss per common share $(2.25) $(2.08) $(2.25) $(0.09)
========= ========= ========= ========
Basic weighted average
common shares and share
equivalents 167,853 167,419 167,853 167,419
Diluted weighted average
common shares and share
equivalents 167,853 167,419 167,853 167,419
-----------------------------------------------------
Contact:
Wyndham International, Inc., Dallas
Analyst Inquiries:
Elizabeth Williams, 214/863-1389
ewilliams@wyndham.com
or
Media Inquiries:
Andrew Jordan, 214/863-1360
ajordan@wyndham.com