Boca Resorts, Inc. Second Quarter Results Exceed Analyst Expectations

Press Release: Boca Resorts, Inc.
January 25, 2001
BOCA RATON, FL -- Boca Resorts, Inc. (NYSE: RST), a leading owner of luxury resorts and entertainment and sports businesses, today reported operating results for its second quarter ended December 31. Net income for the three months ended December 31, 2000 was $1.4 million, or $0.03 per diluted share, and was $0.02 better than consensus estimates as reported by market service, First Call/Thomson Financial.

Second quarter financial highlights include:

• EBITDA from the leisure and recreation business increased 9% to $31.4 million for the three months ended December 31, 2000 compared to $28.8 million during the comparable quarter of the prior year.
• Room revenue per available room (``RevPar'') for the three months ended December 31, 2000 rose 8% over the prior year period driven by increases in average daily rates and occupancy.
• Total revenue per available room (which includes revenue generated from non-room sources such as food and beverage sales, marina revenue, golf, club memberships and retail sales) increased 7% over the prior year three-month period.
• The Company closed on the sale of the Arizona Biltmore Resort and Spa to KSL Recreation Corporation for $335 million, including the assumption of $59.4 million of indebtedness, on December 22, 2000. The Company also received $8.3 million in certain working capital adjustments. The Company may use the net proceeds of the asset sale to significantly reduce debt and/or to make additional investments in its business.

The Company's capital development activities during the three months ended December 31, 2000 included:

• At the Boca Raton Resort and Club, a new Tuscan restaurant designed by David Rockwell opened in November 2000, along with a Mizner-style retail Piazza. Construction has also begun on a new Marina Wing with 112 water-view rooms, a new state-of-the-art 40,000 square foot spa as well as a new golf clubhouse with a restaurant offering casual dining and dramatic views of the championship golf course. In addition, over 80% of the resort's luxury guestrooms have been renovated during the past year and the remainder are scheduled to be completed by December 2001.
• At the Registry Resort located in Naples, Florida, waterfront enhancements have been undertaken including the completion of a new beach pavilion. The Company is also nearing completion on an additional 6,000 square feet of flexible meeting space which when combined with the Registry's existing 38,000 square feet of meeting space will make it the largest meeting venue in the Naples market. Additionally, the Company completed construction of a new pool complex in December 2000.
• At the Bahia Mar Resort and Yachting Center in Fort Lauderdale, Florida, a comprehensive renovation of its guestrooms is substantially complete. A new pool bar and grill also recently opened.

Quarterly Results

Revenue for the three months ended December 31, 2000 increased to $119.1 million, up from $114.6 million for the three months ended December 31, 1999. Higher revenue during the recently completed quarter was primarily attributable to a 6.1% increase in the average daily rate charged at the Company's resorts, a 1.9% increase in occupancy and an increase in golf fees and sales from resort specialty retail shops. Entertainment and sports revenue also increased slightly principally because two more Panther home games were played during the three months ended December 31, 2000 than during the comparable quarter last year.

Operating income for the recently completed quarter totaled $14.4 million compared to $16.7 million for the corresponding quarter of the prior year. The decrease in operating income was primarily the result of an increase in Panthers' player salaries. Net income was $1.4 million for the three months ended December 31, 2000 versus $3.5 million in the year-ago period.

Six Month Results

Revenue for the six months ended December 31, 2000 increased to $181.0 million, up from $168.7 million for the six months ended December 31, 1999. Higher revenue during the current year six-month period was primarily attributable to a 5.6% increase in the average daily rate charged at the Company's resorts, a 1.9% increase in occupancy and an increase in golf fees and other resort non-room revenue.

Operating income for the first half of fiscal 2001 totaled $2.2 million compared to an operating loss of $1.1 million for the corresponding period of the prior year. The improvement for the six months ended December 31, 2000 was primarily due to an increase in leisure and recreation revenue and gross margins, partially offset by a $2.9 million increase in depreciation and amortization expense on recently completed capital projects at the Company's resorts.

Balance Sheet Data

At December 31, 2000, the Company had cash and cash equivalents of $207.7 million, restricted cash of $33.0 million and indebtedness totaling $467.3 million. In addition, the Company maintains a long-term revolving credit line that represents an additional and immediate potential source of liquidity. Borrowings under the credit line are based on an eligible borrowing base, which amounted to $144.7 million at December 31, 2000. The Company's significant cash balance is largely the result of the sale of the Arizona Biltmore Resort and Spa in late December 2000. Capital expenditures totaled $36.6 million during the six months ended December 31, 2000.

Richard C. Rochon, President of Boca Resorts, Inc. commented, ``We are very pleased that the fundamentals of the Company's leisure and recreation business continue to be strong with attractive RevPar and EBITDA growth and reduced business segment costs as a percent of revenue during the second fiscal quarter. Our outlook for the future is extremely positive with contracted bookings for current year group business ahead of last year's pace. In addition, the exciting new capital enhancements underway at the Boca Raton Resort and Club, Registry Resort and Bahia Mar provide us with the opportunity to substantially grow revenue and further enrich our guests' resort experience.''

Boca Resorts, Inc. owns luxury resort properties and golf courses in Florida. The Company's resort and golf portfolio includes the Boca Raton Resort & Club, the Registry Resort at Pelican Bay, the Edgewater Beach Hotel, the Hyatt Regency Pier 66 Hotel and Marina, the Radisson Bahia Mar Resort and Yachting Center, Grande Oaks Golf Club and Naples Grande Golf Club. The Company also owns the Florida Panthers Hockey Club and manages and operates the National Car Rental Center (a multi-purpose entertainment complex where the Panthers play their home games) as well as the Incredible Ice skating rink.

                              - table to follow-

                              BOCA RESORTS, INC.
               UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Three and Six Months Ended December 31,
                    (In thousands, except per share data)

                               Three Months                Six Months
                              2000        1999          2000        1999

    Revenue:
     Leisure and
      recreation           $95,545       $91,478     $155,130      $142,896
     Entertainment
      and sports            23,506        23,159       25,909        25,840
      Total revenue        119,051       114,637      181,039       168,736

    Operating Expenses:
     Cost of leisure and
      recreation services   41,699        40,912       74,618        70,629
     Cost of entertainment
      and sports services   24,556        20,841       29,201        28,368
     Selling, general and
      administrative
      expenses              28,360        27,479       54,934        53,711
     Amortization and
      depreciation expense  10,039         8,697       20,054        17,114
      Total operating
       expenses            104,654        97,929      178,807       169,822

    Operating income
     (loss)                 14,397        16,708        2,232       (1,086)

    Interest and
     other income            1,396           498        1,760           915

    Interest and
     other expense        (14,360)      (13,661)     (30,143)      (27,383)

    Minority interest          ---          (13)          ---            51

    Net income (loss)(1)    $1,433        $3,532   $ (26,151)    $ (27,503)

    Net income (loss)
     per share - basic
     and diluted             $0.03         $0.09     $ (0.64)      $ (0.67)

    Shares used in
     computing net income
     (loss) per share
      - basic               40,876        40,861       40,869        40,861

    Shares used in
     computing net
     income (loss)
     per share - diluted    41,861        40,876       40,869        40,861

(1) No provision (benefit) for income taxes has been recorded for periods presented due to an offsetting change in the Company's valuation allowance.
``Safe Harbor'' Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Boca Resorts, Inc.'s business which are not historical facts are ``forward-looking statements'' that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward looking statements, see ``Risk Factors'' in the Company's Annual Report on Form 10-K for the most recently ended fiscal year.

SOURCE: Boca Resorts, Inc.