EBITDA, as Adjusted, Rises 15.3%, Exceeding Street Expectations; RevPAR Grows 5.7%, Led by Resorts; $140
Million in Non-Strategic Assets Sold; Debt Reduced by $160 Million
Press Release
August 9, 2000
DALLAS, TX -- Wyndham International, Inc. (NYSE:WYN) yesterday reported strong results for the second quarter ended
June 30, 2000, including a 5.7% improvement in RevPAR and record occupancy.
``Coming on the heels of a strong first quarter, we have delivered a record second quarter that exceeded the highest
Street expectations. This confirms the on-target effectiveness of the business plan we implemented last year and
the team that leads this company,'' said Fred J. Kleisner, president and chief executive officer. ``Our plan is
working. We saw improvement in RevPAR across our portfolio. Occupancy was at the highest level in company history
at 77.2%. EBITDA growth more than doubled our revenue pace. We also strengthened our balance sheet through the
sale of non-strategic assets and the reduction of debt.''
Actual earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, was $182.4 million.
This exceeds the highest Street estimate by $2.3 million and, with 65 fewer hotels, represents a 10.3% increase
over the prior year actual earnings of $165.4 million.
On a pro forma basis, which reflects the spin-off of Interstate and other completed asset dispositions, EBITDA,
as adjusted, increased 15.3% to $177.3 million in the second quarter of 2000 from $153.8 million in 1999. Revenues
in the second quarter increased 11.2% to $652.3 million, from $586.6 million in 1999.
For the second quarter, on a pro forma basis, the company reported a net loss of $49 million, or $0.45 per share
(diluted), compared with a loss of $856.4 million, or $5.30 per share (diluted), in the second quarter 1999. The
2000 results were impacted by a non-recurring, non-cash charge of $45.4 million, net of taxes, reflecting a write-down
of certain non-strategic assets currently being held for sale as part of Wyndham's strategy to focus on its core
proprietary brands. The loss in 1999 largely reflected one-time costs associated with the company's recapitalization
and restructuring.
Reflecting its focus on becoming a branded hotel operating company, Wyndham sold $140 million of non-strategic
assets in the quarter. The sale of assets, along with operational cash flow, enabled the company to strengthen
its balance sheet by reducing debt by $160 million in the quarter while cash remained constant.
Solid Operating Performance
Among its core proprietary branded products, the company's second quarter results were paced by the solid performance
of Wyndham Luxury Resorts and Summerfield Suites by Wyndham. Wyndham Luxury Resorts posted a significant RevPAR
gain of 10.0%, while Summerfield Suites by Wyndham gained 7.7%. Wyndham Hotels & Resorts, which includes the
company's Florida and Caribbean resorts, posted a 5.5% RevPAR increase.
``The company's RevPAR strength was led by our products that were added to the company's brand and distribution
system this quarter. Both Wyndham Luxury Resorts and Summerfield Suites by Wyndham benefited from the company's
sales, marketing and reservations systems, as well as the relocation of their headquarters to Dallas,'' said Ted
Teng, chief operating officer.
RevPAR from three new Wyndham flagship hotels in Boston, New Orleans and Chicago greatly exceeded internal projections.
These hotels joined the Wyndham portfolio in the second half of 1999 and, as a result, are not included in the
second quarter comparable results.
``As we look at our current Wyndham-branded portfolio, we see the important revenue opportunities in major metropolitan
markets,'' said Teng. ``As our new upper upscale properties in Boston, Chicago and New Orleans develop a higher
market profile and as we continue to upgrade many of our larger suburban Garden properties into Wyndham Hotels,
we believe we can continue to generate increases in both average daily rate and occupancy.
``We remain focused on securing other key urban markets. We recently signed a 20-year extension of our management
agreement for the Wyndham Anatole, our Dallas flagship, which further enhances our brand and provides us with a
financial return that significantly exceeds our investment hurdles,'' Teng continued. ``We continue to pursue plans
for renovating and branding existing hotels in Honolulu, San Francisco and other markets.''
Among comparable owned and leased hotels, EBITDA, as adjusted, for the total portfolio increased 12.1% on RevPAR
growth of 5.7%. Core proprietary Wyndham-branded hotels registered a 16.7% EBITDA gain on a 5.4% RevPAR increase,
reflecting a gross operating profit margin improvement of 220 basis points to 38.7%. Same store non-proprietary
branded hotels posted a 7.4% EBITDA gain, while RevPAR increased 6.1% over the prior year. Within the non-proprietary
portfolio, properties managed by Wyndham registered a 12.7% EBITDA gain on a 7.0% RevPAR increase, while properties
managed by third parties had a 4.6% EBITDA increase on a 5.7% RevPAR increase. Wyndham continues to work with third-party
managers to improve performance on company-owned properties.
During the quarter, Wyndham reduced its ongoing SG&A expenses to $19.4 million, compared with $26.6 million
on a pro forma basis in the second quarter 1999.
``Our continuing focus is to improve revenue and margins, reduce corporate overhead and simplify our business focus.
By adhering to the fundamentals of our strategic plan, we were able to report excellent EBITDA and revenue growth
in the quarter,'' Kleisner said.
Asset Sales
Reflecting its strategy to dispose of non-strategic real estate and improve its balance sheet, Wyndham completed
nearly $240 million in asset sales through June 30, 2000, putting the company on track to exceed its planned $300
million in asset sales this year. Proceeds are being used primarily to reduce debt, as well as to enhance the core
proprietary brands. Among the assets sold during the quarter was a portfolio that included the Clubhouse Inn brand.
The company also sold three non-proprietary branded assets during the quarter.
About Wyndham International
Wyndham International, Inc. (NYSE:WYN - news) offers upscale and luxury hotel and resort accommodations through
proprietary lodging brands and a management services division. Based in Dallas, Wyndham International 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.
Tables follow...
WYNDHAM INTERNATIONAL, INC.
SECOND QUARTER AND SIX MONTHS OPERATING STATISTICS
Second Quarter 2000
-------------------
2000 1999 % Change
---- ---- --------
COMPARABLE WYNDHAM BRANDED HOTELS (a)
Wyndham Hotels & Resorts
Average daily rate $123.39 $122.39 0.8%
Occupancy 75.6% 72.2% 3.4 ppt
RevPAR $93.31 $88.40 5.5%
Wyndham Luxury Resorts (b)
Average daily rate $269.11 $270.05 -0.3%
Occupancy 62.2% 56.4% 5.8 ppt
RevPAR $167.45 $152.26 10.0%
Summerfield by Wyndham
Average daily rate $125.98 $119.89 5.1%
Occupancy 86.8% 84.7% 2.1 ppt
RevPAR $109.31 $101.48 7.7%
Wyndham Garden
Average daily rate $86.10 $89.24 -3.5%
Occupancy 73.5% 69.5% 4.0 ppt
RevPAR $63.31 $62.07 2.0%
Six Months Ended June 30, 2000
------------------------------
2000 1999 % Change
---- ---- --------
COMPARABLE WYNDHAM BRANDED HOTELS (a)
Wyndham Hotels & Resorts
Average daily rate $135.02 $134.87 0.1%
Occupancy 73.8% 72.2% 1.6 ppt
RevPAR $99.62 $97.33 2.4%
Wyndham Luxury Resorts (b)
Average daily rate $307.84 $301.26 2.2%
Occupancy 60.4% 59.0% 1.4 ppt
RevPAR $185.99 $177.65 4.7%
Summerfield by Wyndham
Average daily rate $125.58 $120.50 4.2%
Occupancy 82.8% 82.0% 0.8 ppt
RevPAR $103.98 $98.85 5.2%
Wyndham Garden
Average daily rate $88.47 $92.95 -4.8%
Occupancy 70.6% 67.0% 3.6 ppt
RevPAR $62.44 $62.26 0.3%
Second Quarter 2000
-------------------
2000 1999 % Change
---- ---- --------
COMPARABLE OWNED & LEASED HOTELS
Proprietary Branded (c)
Average daily rate $125.46 $124.46 0.8%
Occupancy 78.8% 75.3% 3.5 ppt
RevPAR $98.92 $93.82 5.4%
EBITDA Growth -- -- 16.7%
Non-Proprietary Branded (d)
Average daily rate $109.41 $104.67 4.5%
Occupancy 75.5% 74.4% 1.1 ppt
RevPAR $82.62 $77.84 6.1%
EBITDA Growth -- -- 7.4%
Assets Held for Sale
Average daily rate $106.73 $101.74 4.9%
Occupancy 75.9% 74.9% 1.0 ppt
RevPAR $81.06 $76.21 6.4%
EBITDA Growth -- -- 7.9%
Total Portfolio
Average daily rate $117.43 $114.57 2.5%
Occupancy 77.2% 74.9% 2.3 ppt
RevPAR $90.65 $85.76 5.7%
EBITDA Growth -- -- 12.1%
Six Months Ended June 30, 2000
------------------------------
2000 1999 % Change
---- ---- --------
COMPARABLE OWNED & LEASED HOTELS
Proprietary Branded (c)
Average daily rate $134.51 $134.85 -0.3%
Occupancy 76.1% 74.1% 2.0 ppt
RevPAR $102.34 $99.91 2.4%
EBITDA Growth -- -- 9.6%
Non-Proprietary Branded (d)
Average daily rate $109.72 $105.56 3.9%
Occupancy 72.6% 72.1% 0.5 ppt
RevPAR $79.69 $76.16 4.6%
EBITDA Growth -- -- 3.9%
Assets Held for Sale
Average daily rate $107.50 $102.72 4.7%
Occupancy 72.8% 71.9% 0.9 ppt
RevPAR $78.22 $73.81 6.0%
EBITDA Growth -- -- 9.9%
Total Portfolio
Average daily rate $121.24 $119.15 1.8%
Occupancy 74.2% 73.0% 1.2 ppt
RevPAR $89.97 $87.00 3.4%
EBITDA Growth -- -- 7.0%
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 by Wyndham and Wyndham Garden. Hotels that were branded as
of April 1, 1999 and January 1, 1999, respectively.
(d) Non-proprietary brand hotels owned by the Company as of April 1,
1999 and January 1, 1999, respectively. Results include assets held
for sale.
WYNDHAM INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
Quarter Ended
June 30,
----------------------------------
2000 2000 1999
Actual Pro Forma Pro Forma
---------- ---------- ----------
Revenues:
Hotel revenues $ 632,012 624,193 $ 575,106
Management fees and service
fee income 12,422 9,543 9,295
Interest and other income 18,561 18,561 2,198
---------- ---------- ----------
Total revenues 662,995 652,297 586,599
---------- ---------- ----------
Expenses:
Hotel expenses 446,147 440,598 403,718
General and administrative
costs (a) 19,423 19,423 26,571
Interest expense 93,427 93,010 82,209
---------- ---------- ----------
Total operating costs
and expenses 558,997 553,031 512,498
---------- ---------- ----------
Excess revenues over direct
expenses 103,998 99,266 74,101
Non-recurring charges:
Restructuring expenses and
strategic reorganization
costs (b) (1,054) (1,054) (201,624)
Litigation settlements (2,892) (2,892) --
Impairment of assets held
for sale (77,300) (77,300) --
Software conversion -
training expenses (1,945) (1,945) --
Abandoned transaction costs (1,407) (1,407) (2,390)
Y2K costs and pre-opening expenses 302 302 (2,867)
Costs of acquiring franchise (2,448) (2,448) --
Loss on sale of assets (10,844) (10,844) (8,102)
---------- ---------- ----------
Total non-recurring charges (97,588) (97,588) (214,983)
Depreciation and amortization (78,996) (76,760) (73,970)
Equity in earnings from
unconsolidated subsidiaries 3,479 3,479 1,308
Minority interest in consolidated
subsidiaries (1,052) (1,052) (2,171)
---------- ---------- ----------
Loss before income taxes (70,159) (72,655) (215,715)
Provision (benefit) for income
taxes (c) (23,642) (23,642) 640,651
---------- ---------- ----------
Net loss $ (46,517) $ (49,013) $ (856,366)
========== ========== ==========
EBITDA as adjusted $ 182,431 $ 177,282 $ 153,771
(a) 1999 general and administrative costs associated with Interstate
Hotels Corporation divested in a June 18, 1999 spin-off.
EBITDA and net income reflects the revenues and expenses for
Interstate between January 1, 1999 and June 18, 1999.
Actual results after June 18, 1999 are reflected as equity in earnings
from unconsolidated subsidiaries.
(b) 2000 and 1999 restructuring and strategic reorganization costs
include the write-off of goodwill associated with the paired share
structure, fees associated with forward equity transactions, severance
related costs and other one-time transaction related fees resulting
from the second quarter 1999 corporate restructuring and financial
recapitalization.
(c) 1999 includes $675,000 in deferred taxes associated with the
conversion to C Corporation.
WYNDHAM INTERNATIONAL, INC.
EBITDA Reconciliation
(in thousands, except per share data)
(Unaudited)
Quarter Ended
June 30,
---------- ---------- ----------
2000 2000 1999
Actual Pro Forma Pro Forma
---------- ---------- ----------
EBITDA Reconciliation
Net loss $ (46,517) $ (49,013) $(856,366)
Interest expense 93,427 93,010 82,209
Depreciation and amortization 78,996 76,760 73,970
Provision (benefit) for
income taxes (23,642) (23,642) 640,651
---------- ---------- ----------
EBITDA 102,264 97,115 (59,536)
Interest, depreciation and
amortization from equity interest
in unconsolidated subsidiaries 348 348 (94)
Interest, depreciation and
amortization attributable to
minority interests (3,780) (3,780) (2,514)
Restructuring expenses and
strategic reorganization costs 1,054 1,054 201,624
Litigation settlements 2,892 2,892 --
Impairment of assets held for sale 77,300 77,300 --
Software conversion - training
expenses 1,945 1,945 --
One time charge back
(Bedrock termination fees) (14,478) (14,478)
Abandoned transaction costs 1,569 1,569 2,390
Y2K costs and pre-opening expenses (302) (302) 2,867
Amortization of unearned
compensation 327 327 932
Costs of acquiring franchise 2,448 2,448 --
Loss on sale of assets 10,844 10,844 8,102
---------- ---------- ----------
EBITDA as adjusted $ 182,431 $ 177,282 $ 153,771
========== ========== ==========
Per Share Calculations:
Net loss $ (46,517) $ (49,013) $(856,366)
Adjustment for preferred stock (25,652) (25,652) (24,791)
---------- ---------- ----------
Diluted net loss $ (72,169) $ (74,665) $(881,157)
========== ========== ==========
Net loss per share:
Basic $ (0.43) $ (0.45) $ (5.30)
Diluted $ (0.43) $ (0.45) $ (5.30)
Basic weighted average common
shares and share equivalents 167,250 167,250 166,304
Diluted weighted average common
shares and share equivalents 167,250 167,250 166,304
WYNDHAM INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
Six Months Ended
June 30,
-----------------------------------
2000 2000 1999
Actual Pro Forma Pro Forma
----------- ----------- -----------
Revenues:
Hotel revenues $1,269,073 $1,248,718 $1,161,095
Management fees and service fee
income 25,022 18,733 18,682
Interest and other income 22,526 22,526 6,568
----------- ----------- -----------
Total revenues 1,316,621 1,289,977 1,186,345
----------- ----------- -----------
Expenses:
Hotel expenses 885,701 870,963 798,069
General and administrative
costs (a) 38,283 35,182 49,145
Interest expense 185,290 183,813 160,547
----------- ----------- -----------
Total operating costs and
expenses 1,109,274 1,089,958 1,007,761
----------- ----------- -----------
Excess revenues over direct
expenses 207,347 200,019 178,584
Non-recurring charges:
Restructuring expenses and
strategic reorganization
costs (b) (4,383) (4,383) (211,806)
Litigation settlements (2,892) (2,892) --
Impairment of assets held
for sale (77,300) (77,300) --
Software conversion --
training expenses (1,945) (1,945) --
Abandoned transaction costs (1,569) (1,569) (5,038)
Y2K costs and pre-opening
expenses (463) (463) (3,674)
Costs of acquiring franchise (2,448) (2,448) (803)
Loss on sale of assets (14,052) (14,052) (5,327)
----------- ----------- -----------
Total non-recurring charges (105,052) (105,052) (226,648)
Depreciation and amortization (158,447) (152,312) (140,198)
Equity in earnings from
unconsolidated subsidiaries 3,969 3,969 951
Minority interest in consolidated
subsidiaries (3,434) (3,434) (3,430)
----------- ----------- -----------
Loss before income taxes (55,617) (56,810) (190,741)
Provision (benefit) for
income taxes (c) (20,697) (20,697) 651,194
----------- ----------- -----------
Net loss $ (34,920) $ (36,113) $ (841,935)
=========== =========== ===========
EBITDA as adjusted $ 373,845 $ 365,040 $ 334,655
=========== =========== ===========
(a) 1999 general and administrative costs associated with
Interstate Hotels Corporation divested in a June 18, 1999
spin-off. EBITDA and net income reflects the revenues and
expenses for Interstate between January 1, 1999 and June
18, 1999. Actual results after June 18, 1999 are reflected
as equity in earnings from unconsolidated subsidiaries.
(b) 2000 and 1999 restructuring and strategic reorganization
costs include the write-off of goodwill associated with
the paired share structure, fees associated with forward
equity transactions, severance related costs and other
one-time transaction related fees resulting from the
second quarter 1999 corporate restructuring and financial
recapitalization.
(c) 1999 includes $675,000 in deferred taxes associated with
the conversion to C Corporation.
WYNDHAM INTERNATIONAL, INC.
EBITDA Reconciliation
(in thousands, except per share data)
(Unaudited)
Six Months Ended
June 30,
-------------------------------------
2000 2000 1999
Actual Pro Forma Pro Forma
---------- ---------- ----------
EBITDA Reconciliation
Net loss $ (34,920) $ (36,113) $ (841,935)
Interest expense 185,290 183,813 160,547
Depreciation and amortization 158,447 152,312 140,198
Provision (benefit) for income
taxes (20,697) (20,697) 651,194
---------- ---------- ----------
EBITDA 288,120 279,315 110,004
Interest, depreciation and
amortization from equity
interest in unconsolidated
subsidiaries 656 656 1,551
Interest, depreciation and
amortization attributable
to minority interests (6,209) (6,209) (5,862)
Restructuring expenses and
strategic reorganization costs 4,383 4,383 211,806
Litigation settlements 2,892 2,892 --
Impairment of assets held for
sale 77,300 77,300 --
Software conversion - training
expenses 1,945 1,945 --
One time charge back (Bedrock
termination fees) (14,478) (14,478)
Abandoned transaction costs 1,569 1,569 5,038
Y2K costs and pre-opening
expenses 463 463 3,674
Amortization of unearned
compensation 704 704 2,314
Costs of acquiring franchise 2,448 2,448 803
Loss on sale of assets 14,052 14,052 5,327
---------- ---------- ----------
EBITDA as adjusted $ 373,845 $ 365,040 $ 334,655
========== ========== ==========
Per Share Calculations:
Net loss $ (34,920) $ (36,113) $ (841,935)
Adjustment for preferred stock (50,867) (50,867) (49,166)
---------- ---------- -----------
Diluted net loss $ (85,787) $ (86,980) $ (891,101)
========== ========== ===========
Net loss per share:
Basic $ (0.51) $ (0.52) $ (5.36)
Diluted $ (0.51) $ (0.52) $ (5.36)
Basic weighted average common
shares and share equivalents 167,227 167,227 166,304
Diluted weighted average
common shares and share
equivalents 167,227 167,227 166,304
--------------------------------------------------------------------------------
Contact:
Wyndham International, Inc., Dallas
Media Inquiries:
Fred Stern, 214/863-1258
or
Analyst Inquiries:
Elizabeth Williams, 214/863-1265