Press Release
March 7, 2001
NASHVILLE, TN -- Gaylord Entertainment Company (NYSE:GET) yesterday announced financial and operating results for
the fourth quarter and year ended December 31, 2000.
For the quarter, revenues were $137.8 million, a decline of 1.0% from $139.1 million recorded in the fourth quarter
of 1999. Operating cash flow (operating income plus depreciation and amortization, and excluding nonrecurring charges),
was $2.0 million for the latest quarter versus $7.8 million for the same quarter in 1999. Including nonrecurring
items, the company's net loss for the quarter was $105.1 million, or $3.14 per diluted share, versus net income
of $268.6 million, or $8.05 per diluted share, for the fourth quarter of 1999.
For 2000, revenues were $514.4 million, a decline of 3.4% from revenues of $532.6 million recorded in 1999. Operating
cash flow was a negative $8.9 million for the year compared with a positive $47.9 million in 1999. Including nonrecurring
items, the company's net loss for 2000 was $153.5 million, a loss of $4.60 per diluted share, compared with net
income of $349.8 million, or $10.53 per diluted share, for 1999.
``Looking at the whole, 2000 was a difficult year from a financial perspective. A number of our investment initiatives,
particularly in the Internet world, proved unfruitful. That, combined with unplanned senior management departures
and weakness at our Word Entertainment group led to poor financial performance during 2000,'' said Dennis J. Sullivan,
Jr., President and Chief Executive Officer.
``To correct this situation, Gaylord Entertainment began a top-to-bottom review of all its businesses in the latter
part of 2000 with the goal of returning the company to profitability. As a result of this ongoing process, we have
significantly streamlined and consolidated our operations. Since our last earnings announcement, we made a number
of important decisions and reached resolution on several transactions. We shuttered Internet start-up Gaylord Digital
and sold Musicforce.com and Lightsource.com; we ceased operation of the Wildhorse Saloon Orlando; we sold the Opryland
KOA campground; and we consolidated record labels and offices at Word Entertainment.
The table below summarizes the revenues and operating cash flow of the company's on-going business segments, excluding
those operations listed above which are no longer part of the company. The table below also excludes country music
record label development costs incurred during 2000, the operating results of television station KTVT which was
divested in 1999, and development fees earned in 1999 on the Opry Mills shopping complex which did not recur in
2000.
(amounts in thousands) Three Months Ended
December 31,
---------------------------
2000 1999
------------ ------------
Revenues
Hospitality and attractions $ 70,039 $ 71,334
Music, media and entertainment 66,457 62,149
Corporate and other 64 244
------------ -----------
Total revenues $ 136,560 $ 133,727
============ ===========
Operating cash flow
Hospitality and attractions $ 22,545 $ 20,089
Music, media and entertainment (8,546) (2,131)
Corporate and other (7,007) (6,856)
------------ -----------
Total operating cash flow $ 6,992 $ 11,102
============ ===========
Year Ended
December 31,
---------------------------
2000 1999
------------ -----------
Revenues
Hospitality and attractions $ 255,755 $ 256,742
Music, media and entertainment 249,297 226,641
Corporate and other 64 294
------------ -----------
Total revenues $ 505,116 $ 483,677
============ ===========
Operating cash flow
Hospitality and attractions $ 70,135 $ 63,769
Music, media and entertainment (22,582) (275)
Corporate and other (29,282) (23,933)
------------ -----------
Total operating cash flow $ 18,271 $ 39,561
============ ===========
The previously discussed review of operations and the related divestitures resulted in a number of nonrecurring
charges in the fourth quarter of 2000. Although the majority of these items were noncash charges, they increased
operating losses by $127.7 million in 2000. The chart below outlines the major components of these charges (amounts
in thousands):
Three Months Ended
December 31,
-----------------------
2000 1999
--------- ----------
Asset impairments and other
Gaylord Digital $(48,127) $ --
Wildhorse Saloon - Orlando (15,854) --
Word Entertainment (8,188) --
Unison Records (4,905) (12,201)
Other intangible assets (8,325) --
Programming, film and other content (15,035) --
Other fixed assets (4,181) --
Other charges (923) --
--------- ---------
Total asset impairments and other (105,538) (12,201)
Restructuring charges
Gaylord Digital (10,963) --
Other restructuring charges (5,230) --
--------- ---------
Total restructuring charges (16,193) --
Merger costs -- --
Other nonrecurring charges (6,003) --
--------- ---------
Total nonrecurring charges $(127,734) $ (12,201)
========= =========
Year Ended
December 31,
----------------------
2000 1999
---------- ---------
Asset impairments and other
Gaylord Digital $ (48,127) $ --
Wildhorse Saloon - Orlando (15,854) --
Word Entertainment (8,188) --
Unison Records (4,905) (12,201)
Other intangible assets (8,325) --
Programming, film and other content (15,035) --
Other fixed assets (4,181) --
Other charges (923) --
--------- ---------
Total asset impairments and other (105,538) (12,201)
Restructuring charges
Gaylord Digital (10,963) --
Other restructuring charges (5,230) (3,102)
--------- ---------
Total restructuring charges (16,193) (3,102)
Merger costs -- 1,741
Other nonrecurring charges (6,003) --
--------- ---------
Total nonrecurring charges $(127,734) $ (13,562)
========= =========
Excluding businesses that have been divested, nonrecurring gains on KTVT and equity participation rights in 1999,
and the nonrecurring charges discussed above, the company's pro forma net loss for the quarter was $13.1 million,
or $0.39 per diluted share, compared with a pro forma net loss of $3.0 million, or $0.09 per diluted share, for
the fourth quarter of 1999. For the year 2000, pro forma losses were $43.1 million, or $1.29 per diluted share,
compared with a pro forma net loss for 1999 of $10.5 million, or $0.32 per diluted share.
Hospitality and attractions - Revenues for this group decreased 1.9% for the quarter, however, operating cash flow
rose 12.1% due to improved margins. The Opryland Hotel Nashville had an occupancy rate of 79.1% for the quarter,
versus 82.0% for the fourth quarter of 1999, and an average daily rate of $150.71 compared with $147.09, resulting
in a slight decline in RevPAR (revenue per available room) of 1.3% during the quarter compared to the corresponding
prior year period. For the year, occupancy came in at 75.9%, and the average daily rate was $143.86, resulting
in a 2% growth in RevPAR.
Although fourth-quarter revenues decreased 3.3% at the Opryland Hotel Nashville, stringent cost controls resulted
in an operating cash flow increase of 11.0% over the fourth quarter of 1999. The other businesses in hospitality
and attractions as a group had solid increases in revenues and operating cash flow, led by the Radisson Hotel at
Opryland and the General Jackson showboat.
For 2000, the hospitality and attractions group's revenues decreased 0.4% ($256.7 million in 2000 compared to $257.7
million in 1999), while its operating cash flow grew by 10.1% ($70.2 million in 2000 compared to $63.8 million
in 1999).
Music, media and entertainment - Fourth quarter revenues were $67.5 million, a 2.1% increase over the $66.1 million
recorded in the same period last year. Operating cash flow was a negative $13.6 million for the latest quarter
compared with a negative $6.6 million in the fourth quarter of 1999. Excluding divested businesses in this segment,
operating cash flow was a negative $8.5 million in the fourth quarter of 2000 compared to a negative $2.1 million
in the corresponding prior year period.
This segment's pro forma performance in the fourth quarter was hampered by poorer than expected results in the
company's film and sports programming businesses. Word Entertainment's results also contributed to the decline,
impacted by increases in inventory reserves and higher than expected costs related to new audio and video product
development. The company's live entertainment business also had negative comparisons in the quarter due primarily
to an increase in bad debt reserves.
Corporate and Other - Operating cash flow in this segment was a negative $7.0 million in the fourth quarter of
2000 compared to a negative $5.7 million in the fourth quarter of 1999. The change in operating cash flow can be
attributed primarily to Opry Mills development fees recorded during the construction period in 1999 which did not
recur in 2000.
``We are glad to have 2000 behind us, and we continue to pursue initiatives that we believe will create value for
our shareholders. For instance, the Opryland Hotel Florida, scheduled to open Feb. 2, 2002, now has more than 770,000
room nights under contract, including more than 50% of available rooms in 2002, with almost a year's selling time
remaining before opening. In our music, media and entertainment group, we have successfully re-branded Country
Music Television International to MusicCountry. Our most recent introductions of MusicCountry, which offers a variety
of musical styles tailored to regional audiences, were in Argentina, Brazil and Australia. MusicCountry now has
approximately 8.5 million subscribers,'' Sullivan said.
Effective October 1, 2000, the company adopted the provisions of SEC Staff Accounting Bulletin No. 101, ``Revenue
Recognition in Financial Statements,'' as amended (``SAB 101''), and certain related authoritative literature.
Accordingly, the company has classified certain amounts as revenue that historically, in accordance with industry
practice, had been reported as a reduction to operating expenses. The adoption of SAB 101 and the related authoritative
literature had no impact on reported operating cash flow or operating income. All prior periods have been restated
to conform to the new guidance contained in the authoritative literature.
Gaylord Entertainment will hold a conference call to discuss this release today at 11:00 a.m. Eastern time. Investors
will have the opportunity to listen to the conference call over the Internet at www.streetevents.com. To listen
to the live call, please go to the web site at least fifteen minutes early to register, download, and install any
necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly
after the call through the end of business on April 5, 2001.
This press release contains statements with respect to the company's beliefs and expectations of the outcome of
future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of
1995. These forward-looking statements, including the outcome of the company's strategic decisions and the development
schedules, bookings and utilization of the company's hotels are subject to risks and uncertainties that could cause
actual results to differ materially from the statements made. Other factors that could cause operating and financial
results to differ are described in the filings of Gaylord Entertainment with the Securities and Exchange Commission.
Additional risks may be detailed from time to time in reports to be filed with the Commission. Gaylord Entertainment
does not undertake any obligation to release publicly any revisions to forward-looking statements made herein to
reflect events or circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events.
Gaylord Entertainment is a diversified entertainment company whose businesses operate in two groups: hospitality
and attractions, and music, media and entertainment. It is headquartered in Nashville, Tenn., and its stock is
traded on the New York Stock Exchange (symbol:GET).
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL RESULTS
(Amounts in thousands, except per share data)
Three Months Ended
December 31,
--------------------- %
2000 1999 chg
--------- --------- -----
Revenues
Hospitality and attractions $ 70,209 $ 71,538 (1.9)
Music, media and entertainment 67,489 66,090 2.1
Corporate and other 64 1,494 (95.7)
--------- --------- -----
Total revenues 137,762 139,122 (1.0)
========= ========= =====
Operating cash flow (a)
Hospitality and attractions 22,519 20,084 12.1
Music, media and entertainment (13,555) (6,610) (105.1)
Corporate and other (7,007) (5,677) (23.4)
--------- --------- -----
Total operating cash flow 1,957 7,797 (74.9)
========= ========= =====
Operating income (loss)
Hospitality and attractions 15,389 13,285 15.8
Music, media and entertainment (21,007) (12,656) (66.0)
Corporate and other (8,643) (7,600) (13.7)
Nonrecurring items (127,734) (12,201) -
--------- --------- -----
Total operating income (loss) (141,995) (19,172) -
Interest expense (11,647) (4,815) (141.9)
Interest income 1,355 2,006 (32.5)
Gain on divestiture of KTVT - 459,307 -
Gain on equity participation rights - - -
Other (2,116) (405) (422.5)
--------- --------- -----
Income (loss) before taxes (154,403) 436,921 -
Income taxes (49,267) 168,305 -
--------- --------- -----
Net income (loss) $(105,136) $ 268,616 -
========= ========= =====
Net income (loss) per share - basic $ (3.14) $ 8.12 -
========= ========= =====
Avg. shares outstanding - basic 33,450 33,079 1.1
========= ========= =====
Net income (loss) per share - diluted $ (3.14) $ 8.05 -
========= ========= =====
Avg. shares outstanding - diluted 33,450 33,380 0.2
========= ========= =====
Year Ended
December 31,
--------------------- %
2000 1999 chg
--------- --------- -----
Revenues
Hospitality and attractions $ 256,722 $ 257,709 (0.4)
Music, media and entertainment 257,594 269,637 (4.5)
Corporate and other 64 5,294 (98.8)
--------- --------- -----
Total revenues 514,380 532,640 (3.4)
========= ========= =====
Operating cash flow (a)
Hospitality and attractions 70,202 63,785 10.1
Music, media and entertainment (49,826) 3,348 -
Corporate and other (29,282) (19,223) (52.3)
--------- --------- -----
Total operating cash flow (8,906) 47,910 -
========= ========= =====
Operating income (loss)
Hospitality and attractions 43,053 38,270 12.5
Music, media and entertainment (75,295) (16,962) (343.9)
Corporate and other (35,119) (25,972) (35.2)
Nonrecurring items (127,734) (13,562) -
--------- --------- -----
Total operating income (loss) (195,095) (18,226) -
Interest expense (31,629) (16,101) (96.4)
Interest income 4,729 6,275 (24.6)
Gain on divestiture of KTVT - 459,307 -
Gain on equity participation rights - 129,875 -
Other (4,548) 392 -
--------- --------- -----
Income (loss) before taxes (226,543) 561,522 -
Income taxes (73,073) 211,730 -
--------- --------- -----
Net income (loss) $(153,470) $ 349,792 -
========= ========= =====
Net income (loss) per share - basic $ (4.60) $ 10.63 -
========= ========= =====
Avg. shares outstanding - basic 33,389 32,908 1.5
========= ========= =====
Net income (loss) per share - diluted $ (4.60) $ 10.53 -
========= ========= =====
Avg. shares outstanding - diluted 33,389 33,213 0.5
========= ========= =====
(a) Operating income plus depreciation, amortization and
nonrecurring items.
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2000 and 1999
(Amounts in thousands)
2000 1999
----------- -----------
ASSETS
Current assets:
Cash $ 48,519 $ 18,696
Trade receivables 66,869 83,289
Other current assets 100,265 62,051
----------- -----------
Total current assets 215,653 164,036
Property and equipment, net of
accumulated depreciation 778,960 611,582
Intangible assets, net of
accumulated amortization 103,792 141,874
Investments 606,006 742,155
Long-term notes receivable 19,284 19,715
Other assets 215,858 53,022
----------- -----------
Total assets $ 1,939,553 $ 1,732,384
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 176,878 $ 299,788
Accounts payable and accrued
liabilities 151,845 128,123
----------- -----------
Total current liabilities 328,723 427,911
Long-term debt 20,551 10,335
Secured forward contract liability 613,054 -
Deferred income taxes 204,805 292,966
Other liabilities 43,009 38,693
Minority interest 1,546 1,320
Stockholders' equity 727,865 961,159
----------- -----------
Total liabilities and
stockholders' equity $ 1,939,553 $ 1,732,384
=========== ===========
--------------------------------------------------------------
Contact:
Gaylord Entertainment Company, Nashville
Media:
Tom Adkinson, 615/316-6302
E-mail: tadkinson@gaylordentertainment.com
or
Investor:
J. Russell Worsham, 615/316-6564
rworsham@gaylordentertainment.com