Press Release
May 2, 2001
NASHVILLE, TN -- Gaylord Entertainment Company (NYSE:GET) yesterday announced its financial and operating results
for the first quarter ended March 31, 2001.
For the quarter, revenues were $115.3 million, an increase of 3.5% from $111.5 million recorded in the first quarter
of 2000. Operating cash flow (operating income plus depreciation and amortization) improved to $2.6 million in
the latest quarter from a negative $5.0 million for the same quarter in 2000. Excluding non-cash gains and losses
resulting from the adoption of a new accounting standard, as discussed below, the company had a net loss for the
quarter of $13.1 million, or $0.39 per diluted share. This compares to a net loss of $15.0 million, or $0.45 per
diluted share, for the first quarter of 2000.
As a result of the adoption of new accounting standards related to derivative and hedging transactions, the company's
current period financial results reflect changes in the market values of both its Viacom Class B common stock and
the derivatives in a related secured forward exchange contract. In accordance with these standards, the company
recorded a pretax non-operating loss in the first quarter of 2001 of $1.2 million related to changes in the market
value of the Viacom stock since its acquisition in October 1999. Changes in the market value of the derivatives
discussed above during the first quarter of 2001 resulted in a pretax non-operating gain of $38.9 million in the
period. In addition, the company recorded a nonrecurring after-tax gain of $11.9 million resulting from the cumulative
effect of the adoption of this accounting change. The aggregate after-tax impact of these gains and losses on net
income for the quarter was $37.2 million, or $1.11 per diluted share. As a result, the company's net income for
the quarter was $24.1 million, or $0.72 per diluted share. The financial results for the first quarter of 2001
are not necessarily indicative of future quarterly results, which may be materially impacted either positively
or negatively by changes in the market values of the Viacom stock and the derivatives contained in the secured
forward exchange contract.
``The improvement in our operating cash flow for the first quarter is a good start, resulting from recent significant
strategic decisions,'' said outgoing President Dennis J. Sullivan, Jr. ``Based on these decisions, a number of
assets and properties which were not meeting our performance expectations have been sold or shut down. By returning
our focus to the company's core assets and businesses, the company is in a stronger position to welcome our new
president and chief executive officer, as well as our new chairman.''
The company announced last week that Colin V. Reed has joined Gaylord Entertainment as its President and Chief
Executive Officer, and Michael D. Rose has been named as the company's new Chairman. Both men have had distinguished
careers in the hospitality business, each having served as senior executives for Promus Hotel Corporation, Harrah's
Entertainment, Inc. and Holiday Corporation.
Also as previously announced, the company completed the sale of Pandora Films, Gaylord Films, Gaylord Sports Management,
Gaylord Event Television and Gaylord Production Company in March of this year. The operating results of these five
businesses are included in the company's financial results prior to their disposition. The table below summarizes
the revenues and operating cash flow of the company's on-going business segments on a pro forma basis, excluding
these five businesses as well as the following businesses that are no longer part of the company: Gaylord Digital,
the Wildhorse Saloon near Orlando, the Opryland KOA Campground, and country music record label development costs
(amounts in thousands).
Three Months Ended
March 31,
2001 2000
---- ----
Revenues
Hospitality and attractions $ 60,118 $ 56,552
Music, media and entertainment 52,940 49,976
Corporate and other 26 -
------- -------
Total revenues $113,084 $106,528
======= =======
Operating cash flow
Hospitality and attractions $ 13,095 $ 11,304
Music, media and entertainment (3,250) (3,291)
Corporate and other (6,194) (6,943)
------- -------
Total operating cash flow $ 3,651 $ 1,070
======= =======
By excluding the financial impact of businesses that have been divested as well as the gains and losses on the
Viacom stock and associated derivatives discussed above, the company posted a pro forma net loss for the quarter
of $11.0 million, or $0.33 per diluted share. This compares with a pro forma net loss of $9.8 million, or $0.29
per diluted share, for the first quarter of 2000. The increased losses are primarily due to non-cash interest costs
in first quarter 2001 resulting from the secured forward exchange contract, which the company entered into in May
2000.
``We are encouraged by the improvement in our operating results and continue to take steps to position the company
for future growth,'' Sullivan stated. ``The Opryland Hotel Florida is on schedule for its February 2, 2002 grand
opening and continues to show an outstanding pre-booking pace. In addition, we successfully completed a $375 million
financing of our Opryland Hotel Nashville at the end of first quarter 2001. The subsequent securitization of the
senior portion of this financing by our lenders was completed in April and was met with strong demand from the
investment community. This is a solid indicator of the strength of our core hospitality franchise.''
Hospitality and attractions - Revenues for hospitality and attractions increased 6.1% for the quarter, while operating
cash flow rose 16.9%. The Opryland Hotel Nashville had an occupancy rate of 73.7% for the quarter, versus 72.0%
for the first quarter of 2000, and an average daily rate of $143.53 compared with $133.43, resulting in an increase
in RevPAR (revenue per available room) of 10.1% during the quarter compared to the corresponding prior year period.
This increase led to growth in revenues of 6.9% at the Opryland Hotel Nashville, to $57.0 million from $53.3 million
in the first quarter last year. The other businesses in hospitality and attractions as a group had a slight decline
in revenues and operating cash flow during the seasonally slow first quarter for these businesses.
Music, media and entertainment - First quarter revenues were $55.2 million, a 0.6% increase over the $54.8 million
recorded in the same period last year. As noted in the table above, on a pro forma basis (excluding divested operations),
revenues increased 5.9% in the first quarter of 2001 in this segment of the business. Operating cash flow improved
to a negative $4.3 million for the latest quarter compared with a negative $9.3 million in the first quarter of
2000. Excluding divested businesses in this segment, operating cash flow was consistent with the corresponding
prior-year period at a negative $3.3 million.
This segment's performance in the first quarter of 2001, excluding divested businesses, reflects positive year-over-year
comparisons at the Ryman Auditorium and Acuff-Rose Music Publishing as well as the contribution of Corporate Magic,
which was acquired at the end of the first quarter in 2000. These advances were offset by declines at Word Entertainment
and WSM Radio. Word's results are partially due to more conservative accounting policies adopted as part of last
year's strategic review, while WSM's results are reflective of a very competitive market for country music listeners
in Nashville.
Corporate and Other - Operating cash flow in this segment was a negative $6.2 million in the first quarter of 2001
compared to a negative $6.9 million in the first quarter of 2000, with the improvement due primarily to personnel
reductions and cost controls.
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.gaylordentertainment.com
and 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 June 1, 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 expectations regarding future financial and operating results,
the effects or 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 Company 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 Company 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
March 31,
--------------------- %
2001 2000 chg
--------- --------- ------
Revenues
Hospitality and attractions $ 60,118 $ 56,647 6.1
Music, media and entertainment 55,153 54,804 0.6
Corporate and other 26 - -
--------- --------- ------
Total revenues 115,297 111,451 3.5
========= ========= ======
Operating cash flow (a)
Hospitality and attractions 13,095 11,205 16.9
Music, media and entertainment (4,331) (9,274) 53.3
Corporate and other (6,194) (6,943) 10.8
--------- --------- ------
Total operating cash flow 2,570 (5,012) -
========= ========= ======
Operating income (loss)
Hospitality and attractions 6,237 4,759 31.1
Music, media and entertainment (8,569) (14,717) 41.8
Corporate and other (7,753) (8,563) 9.5
--------- --------- ------
Total operating income (loss) (10,085) (18,521) 45.5
Interest expense (9,204) (5,618) (63.8)
Interest income 1,097 498 120.3
Change in fair market value of
Viacom stock (1,198) - -
Change in fair market value of
derivatives 38,939 - -
Other (1,319) 677 -
--------- --------- ------
Income (loss) before taxes and
accounting change 18,230 (22,964) -
Income taxes 6,015 (7,923) -
--------- --------- ------
Income (loss) before accounting
change 12,215 (15,041) -
Cumulative effect of accounting
change, net 11,909 - -
--------- --------- ------
Net income (loss) $ 24,124 $ (15,041) -
========= ========= ======
Net income (loss) per share -
basic & diluted:
Income (loss) before accounting
change $ 0.36 $ (0.45) -
Cumulative effect of accounting
change 0.36 - -
--------- --------- ------
Net income (loss) per share $ 0.72 $ (0.45) -
========= ========= ======
Avg. shares outstanding - basic 33,427 33,329 0.3
========= ========= ======
Avg. shares outstanding - diluted 33,509 33,329 0.5
========= ========= ======
(a) Operating income plus depreciation and amortization
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2001 and 2000
(Amounts in thousands)
2001 2000
------------ ------------
ASSETS
Current assets:
Cash $ 182,432 $ 17,373
Trade receivables 66,687 91,778
Other current assets 89,783 76,639
------------ ------------
Total current assets 338,902 185,790
Property and equipment, net of
accumulated depreciation 824,276 627,299
Intangible assets, net of
accumulated amortization 81,036 154,020
Investments 576,955 672,578
Long-term notes receivable 19,609 19,447
Deferred financing costs 156,967 -
Derivative - put option asset 179,550 -
Other assets 55,180 52,568
------------ ------------
Total assets $ 2,232,475 $ 1,711,702
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term
debt $ 9,382 $ 372,359
Accounts payable and accrued
liabilities 130,269 122,206
------------ ------------
Total current liabilities 139,651 494,565
Long-term debt 372,168 9,670
Secured forward exchange contract 613,054 -
Deferred income taxes 205,319 264,706
Derivative - call option liability 122,289 -
Other liabilities 44,130 40,107
Minority interest 1,324 1,400
Stockholders' equity 734,540 901,254
------------ ------------
Total liabilities and
stockholders' equity $ 2,232,475 $ 1,711,702
============ ============
--------------------------------------------------------------
Contact:
Gaylord Entertainment Company
Media Contact:
Tom Adkinson, 615/316-6302
E-mail: tadkinson@gaylordentertainment.com
or
Investor Contact:
J. Russell Worsham, 615/316-6564
E-mail: rworsham@gaylordentertainment.com