Fairfield Hosts Online Conference to Discuss Earnings

Press Release: Fairfield Communities, Inc.

April 24, 1999
Fairfield Communities, Inc. (NYSE:FFD) hosted a conference call on the Internet to discuss earnings on Friday, April 23, 1999 at 10:00 a.m. EDT, and the news for their financial results for the first quarter ended March 31, 1999 was mostly positive.

Gross sales of vacation ownership interests (VOI), the largest component of revenue, increased 20% during the first quarter of 1999 to $72.1 million from $60.4 million in the prior year quarter. Net VOI sales increased 21% to $72.8 million in the first quarter of 1999, compared to $60.2 million in the first quarter of 1998. Total revenue for the first quarter of 1999 was $99.1 million, up from $85.9 million in the first quarter of 1998.

Net earnings for the quarter ended March 31, 1999 increased 18% to $9.9 million from $8.4 million in the prior year period. Diluted earnings per share were $0.22 in the first quarter of 1999, a 22% increase from $0.18 in the first quarter of 1998.

"Fairfield's VOI sales growth for the quarter was in line with our expectations,'' said John McConnell, Fairfield's President and Chief Executive Officer. "In addition to reporting excellent sales, we were able
to lower our product costs while making improvements to our sales and marketing efficiencies in excess of our original expectations.''

"During the quarter, we furthered our strategy of growth through geographic expansion with the acquisition of properties for development in Durango, Colorado and Daytona Beach, Florida,'' said John McConnell.

"We see a tremendous and largely untapped market for our high-quality VOIs in the Western U.S. as well as opportunities to add to the diversity of vacation experiences we offer. For example, the Durango resort, our sixth property in the West, should have year-round appeal to people with a wide range of outdoor recreational interests, including skiing, golfing, hiking and swimming.

"At the same time, Florida continues to be one of our most popular destinations. We are developing the Daytona Beach resort to meet the demand for the greatest variety of experiences there. By pursuing development opportunities in a variety of markets, we should be able to provide long term value for our VOI owners as well as our shareholders.''

Discovery vacation sales remained strong for the quarter. This program offers prospective owners firsthand experience with a Fairfield vacation and has the highest close rate of any of the Company's marketing programs. For the quarter, Discovery sales increased 25% to 3,447, as compared to 2,762 in the prior year period.

The Company's Urban Sales Center strategy demonstrated major improvements for the quarter, as the Company continued to maximize the opportunities provided by off-site sales centers. For the quarter, Urban Sales Center revenue increased significantly as compared to the prior year period, while having an even greater impact on operating margins.

Net interest income increased to $9.7 million in the first quarter of 1999 from $7.1 million in the first quarter of 1998, a 38% increase. This is a result of the continued growth of the Company's contracts receivable portfolio coupled with a decrease in the weighted average cost of funds to 7.2% for the first quarter of 1999 from 8.7% for the prior year period. Contracts receivable, inclusive of the Company's wholly-owned, unconsolidated qualifying special purpose entities, increased 20% over March 31, 1998 to $375 million at March 31, 1999.

"During the quarter, we were able to lower our funding cost 150 basis points from the prior year period through the continued sale of our contracts receivable into our unconsolidated special purpose funding
entities,'' said Robert W. Howeth, Senior Vice President and Chief Financial Officer. "This ability to access low cost funding sources demonstrates the capital markets endorsement of the quality of our
contracts.''

Fairfield Communities, Inc., incorporated in 1969, is one of the nation's largest vacation ownership companies, providing quality recreational experiences at twenty-six locations in 11 states and the Bahamas, to more than 240,000 Fairfield property owners.