Company Press Release
May 3, 2000
DALLAS, TX -- Silverleaf Resorts, Inc. (NYSE: SVR) yesterday reported financial results for the first quarter ended
March 31, 2000.
First Quarter Results
Total revenue for the first quarter increased 32% to $64.9 million from $49.1 million in the first quarter of 1999.
Vacation interval sales increased 30% to $53.9 million for the quarter ended March 31, 2000, from $41.3 million
in the comparative prior year period. Interest income for the quarter increased 55% to $8.8 million, compared to
$5.7 million in the year-ago period. Upgrade sales accounted for approximately 23% of total vacation interval sales,
a 26% increase in dollar volume compared with last year's first quarter. The number of units sold increased 19%,
while the average sales price increased 10%.
``Our strong vacation interval sales growth demonstrates that the market opportunity for our products is there,''
commented Robert Mead, Chairman and Chief Executive Officer. ``We have seen this demand, not only at our core properties
in Texas and Missouri, but also at newer resorts serving the Chicago, St. Louis, Atlanta, New York, and Boston
markets. Our newest resort in Galveston, TX, is enjoying early success as the Company's first beachfront destination.
These positive developments validate our unique model, show the widespread popularity of high quality resorts located
close to home, and underscores that our diverse and expanded system of properties positions the Company to meet
the needs of our existing and future owners.''
For the quarter ended March 31, 2000, net income was $1.9 million, or $0.15 per share, compared to $4.8 million,
or $0.38 per share, in the first quarter of 1999. As anticipated, the decrease in net income is due to marketing
efficiencies not yet in line with the Company's expectations. Total shareholders' equity at March 31, 2000 was
$163.1 million and book value was $12.65 per diluted share.
Outlook
``Looking out into the year, we believe Silverleaf is positioned for strong top line growth, as vacation interval
sales continue to be robust. We expect vacation interval sales to grow between 15% to 20% this year over 1999,
with some quarter to quarter fluctuations. A very positive trend is found in the Company's sales efficiencies.
A seasoned, well managed sales force, our growing membership base with the associated growth in upgrade sales,
and high quality resorts have all contributed to increasing sales effectiveness.''
``Marketing costs in absolute dollars are expected to be comparable to those reported in the first quarter. As
a result, we are anticipating earnings for the full year 2000 to be approximately $1.00 to $1.10 per diluted share.
Based on improvements over the course of 2000 in our marketing efficiencies, we believe the Company is well positioned
for 2001 earnings to be between $1.60 to $1.80 per diluted share. Our number one priority is to get telemarketing
efficiencies in line by improving productivity per operator hours, thus generating more tours at a lower per tour
cost, and increasing the corresponding revenue. To accomplish this, we are holding the line on marketing costs
and limiting further call center expansion until our existing call centers are on budget. Additionally, we have
bolstered our call center management teams and fine-tuned the pay structures to increase incentives with respect
to our call center operators. We have implemented better statistical measurements of operator performance and have
increased the minimum performance standards. By implementing improved database management systems, we have begun
to improve our contact ratios, increase efficiencies, and believe that in the last few weeks we have turned the
corner on our tour flow growth,'' concluded Mead.
Resort Update
During the first quarter, the Company also continued to enhance its family of resorts. In preparation for an April
2000 opening, Silverleaf worked to complete construction of the first 24 units and accompanying amenities at the
Company's newest resort, Seaside in Galveston, TX. Seaside has been open for sales since early January and is 50%
sold out of its first 24 units. To further validate the Company's strategic choice of this location as a destination
resort, Carnival Cruises has recently announced the introduction of four and five-day cruises out of Galveston.
Silverleaf also added a $300,000 state-of-the-art 18-hole miniature golf course, swimming pool, and basketball
and tennis courts at the Company's Apple Mountain resort. Other significant development activities in the quarter
occurred at The Villages, Piney Shores and Hill Country Resorts in Texas; at Timber Creek Resort outside St. Louis;
at Fox River Resort near Chicago; at Oak N' Spruce Resort in Western Massachusetts; and at Holiday Hills Resort
in Branson, Missouri.
Based in Dallas, Texas, Silverleaf Resorts, Inc. currently owns and/or operates 22 resorts in various stages of
development. Silverleaf resorts offer a wide array of country club-like amenities, such as golf, swimming, horseback
riding, boating, and many organized activities for children and adults. Silverleaf has a managed ownership base
of over 106,000. Further information on the Company may be found on its website, www.silverleafresorts.com.
This release contains certain forward-looking statements which involve risks and uncertainties and actual results
may differ materially from those anticipated. The Company is subject to specific risks associated with the timeshare
industry, the regulatory environment, and various economic factors. Additionally, anticipated results are dependent
upon the Company's ability to identify and acquire or develop other operations under terms which are beneficial
to the Company and its shareholders. Other risk factors are more fully discussed under ``Cautionary Statements''
in the Company's SEC reports, including the Company's 1999 annual report on Form 10K (pages 29 through 35).
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended
March 31,
------------------------
2000 1999
---------- ----------
Revenues:
Vacation Interval sales $ 53,886 $ 41,328
Sampler sales 1,297 700
---------- ----------
Total sales 55,183 42,028
Interest income 8,769 5,666
Interest income from affiliates 8 12
Management fee income 81 900
Other income 865 474
---------- ----------
Total revenues 64,906 49,080
Costs and Operating Expenses:
Cost of Vacation Interval sales 9,442 5,769
Sales and marketing 30,527 20,685
Provision for uncollectible notes 5,388 4,133
Operating, general and administrative 7,307 5,368
Other expense 934 753
Depreciation and amortization 1,781 1,205
Interest expense 6,478 3,282
---------- ----------
Total costs and operating expenses 61,857 41,195
Income before provision for income taxes 3,049 7,885
Provision for income taxes (1,174) (3,036)
---------- ----------
Net Income $ 1,875 $ 4,849
========== ==========
Net income per common share:
Basic $ 0.15 $ 0.38
========== ==========
Diluted $ 0.15 $ 0.38
========== ==========
Weighted average shares outstanding:
Basic 12,889,417 12,889,417
========== ==========
Diluted 12,889,417 12,889,417
========== ==========
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(Unaudited)
March 31, December 31,
ASSETS 2000 1999
---------- ----------
Cash and cash equivalents $ 12,211 $ 4,814
Restricted cash 903 903
Notes receivable, net of allowance
for uncollectible notes of
$35,942 and $32,326, respectively 316,312 286,581
Amounts due from affiliates 7,405 6,596
Inventories 116,937 112,810
Land, equipment, buildings,
and utilities, net 51,596 51,050
Prepaid and other assets 17,321 17,203
---------- ----------
TOTAL ASSETS $ 522,685 $ 479,957
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 16,116 $ 15,539
Unearned revenues 5,902 5,601
Income taxes payable 518 185
Deferred income taxes, net 28,902 28,251
Notes payable and capital lease obligations 233,162 194,171
Senior subordinated notes 75,000 75,000
---------- ----------
Total Liabilities 359,600 318,747
---------- ----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, par value $0.01 per share,
100,000,000 shares authorized,
13,311,517 shares issued, and
12,889,417 shares outstanding 133 133
Additional paid-in capital 109,339 109,339
Retained earnings 58,612 56,737
Treasury stock, at cost (422,100 shares) (4,999) (4,999)
---------- ----------
Total Shareholders' Equity 163,085 161,210
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 522,685 $ 479,957
========== ==========
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED SELECTED FINANCIAL DATA
(in thousands, except average price data)
(Unaudited)
As of and for the Quarters Ended
--------------------------------------------
03/31 12/31 09/30 06/30 03/31
2000 1999 1999 1999 1999
-------- -------- -------- -------- --------
FINANCIAL DATA:
Earnings Before Interest
expense, Provision for
Income Taxes, and
Depreciation and
Amortization expense
("EBITDA") $ 11,308 $ 12,555 $ 14,780 $ 13,985 $ 12,372
Gross notes receivable $352,254 $318,907 $287,517 $254,766 $222,615
Allowance for
uncollectible notes $ 35,942 $ 32,326 $ 29,018 $ 26,343 $ 24,533
Delinquency percentage
(overall) (90 day basis) 11.9% 10.4% 9.3% 9.1% 10.5%
OPERATING DATA:
Number of Vacation
Intervals sold
(excluding upgrades) 4,624 3,971 3,948 4,031 3,879
Number of upgraded
Vacation Intervals sold 2,934 3,238 3,152 2,762 2,248
Average price of Vacation
Intervals sold
(excluding upgrades) $ 8,993 $ 9,541 $ 9,357 $ 8,532 $ 8,146
Average price of upgraded
Vacation Intervals sold $ 4,193 $ 4,583 $ 4,367 $ 4,364 $ 4,329
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Contact:
Silverleaf Resorts, Inc., Dallas
Harry J. White, Jr., CFO
214/631-1166
or
Morgen-Walke Associates, New York
Michele Katz/Michael Polyviou
Press: Heather Fox
212/850-5600