RESORTQUEST INTERNATIONAL REPORTS SECOND QUARTER 1999 RESULTS; Completes Three Acquisitions, Announces 57 Percent Rise in Pro Forma Earnings
Per Share
Source: ResortQuest International
August 9, 1999
MEMPHIS, TN -- ResortQuest International, Inc. (NYSE: RZT), the first brand name and online booking service (ResortQuest.com) in vacation condominium and home rentals, sales and property management
services, today announced pro forma results for the second quarter ended June 30, 1999.
Pro forma net income for the second quarter rose 54 percent to $2.0 million from pro forma net income of $1.3 million
in 1998, on a 22 percent increase in pro forma revenue to $31.0 million. Pro forma net income per diluted share
was 11 cents, compared to 7 cents per diluted share in the 1998 second quarter, a 57 percent increase. Results
were in line with revised analysts estimates.
"During the quarter, we continued the integration of our founding companies and our post-IPO acquisitions
into our operations," said David Sullivan, chairman and chief executive officer. "We continue to identify
new acquisition candidates that either strengthen our position in existing markets or represent strong entries
into key new markets. In July, we purchased our second property manager in exclusive Hilton Head Island, doubling
our share of rental units there. Yesterday we announced our first acquisition in Orlando, Florida, one of the most
popular resort vacation markets in the world and a "must" destination for us. This purchase of the largest
and most established full-service, short-term rental property management company in central Florida, combined with
our other six Florida locations, increases our holdings in the state to nearly 3,700 vacation rental units.
"During the quarter, we further diversified our portfolio with three acquisitions, including our second purchase
in Arizona, and an acquisition in a new market for us: Lake Erie Islands, Ohio, a popular fishing and boating vacation
resort market along the southern shore of Lake Erie. We also expanded our presence in Colorado with the acquisition
of the area's leading vacation property management and real estate company, with properties in Aspen and Snowmass
Village. We now have a majority share of the vacation rental and real estate market in this key Colorado resort."
Solid Operating Results
David Levine, president and chief operating officer, commenting on operating results, said, "Our Beach segment
reported a 10.1 percent increase in total lodging revenues on a 6.4 percent increase in units and a 7.5 percent
increase in occupied nights. Overall, on a comparable basis, occupied room nights were up 2.2 percent while occupancy
percentage during the quarter was unchanged."
"During the quarter, we enhanced our web site capabilities with virtual tours, which has generated increased
interest and visits to our site," Levine said. "We recorded a 26 percent increase in user sessions and
booked 6 percent of our business through the Internet in the second quarter."
Strong Balance Sheet
"During the second quarter, we completed the placement of $50 million of senior secured notes with five national
insurance companies," said Jeff Jarvis, ResortQuest's senior vice president and chief financial officer. "The
financing provided us with an additional source of cash and reduces our dependency on traditional bank financing.
It also allowed us to pay off our revolving credit facility, which is now available to fund future acquisitions.
At June 30, 1999, we had nearly $60 million in cash and credit available to us.
"In July, the Securities and Exchange Commission declared effective our new 5 million share common stock shelf
registration statement, which will allow us to continue to issue registered common stock in connection with acquisitions,"
Jarvis added.
First Six Months 1999 Results
For the first six months of 1999, pro forma net income rose 29 percent to $5.3 million from pro forma net income
of $4.1 million in 1998. Pro forma revenue rose to $62.6 million from $52.3 million for the same period in 1998.
Pro forma net income per diluted share was 30 cents, compared to 24 cents per diluted share for the first six months
of 1998.
Since the company commenced operations in May 1998 and its founding acquisitions required special accounting treatment,
pro forma results most accurately reflect the financial status of the company. The consolidated statements of pro
forma income include the results of operations of the founding companies, Abbott Resorts, and the three acquisitions
accounted for as poolings of interests (Plantation Resort, Mountain High Management, High Country Resorts) and
corporate expense in both current and prior year periods. The remaining acquisitions are included in the results
of operations from their respective effective dates of acquisition forward.
ResortQuest historical consolidated financial information for the second quarter ended June 30, 1999 and 1998 includes
the results of Aston Hotels & Resorts and the three acquisitions accounted for as poolings of interests prior
to the founding acquisitions and the company's initial public offering, and the combined balances and transactions
of ResortQuest and the founding companies only since May 26, 1998 and post-IPO transactions since their respective
effective dates of acquisition. Comparability of actual results for the quarter and prior year may be misleading
and are not necessarily indicative of the results of the combined operations. As a consequence, historical results
are not included in this press release.
Memphis-based ResortQuest International provides the first one-stop resource for vacation home and condominium
rentals in 35 premier resort destinations in North America. ResortQuest's total portfolio now comprises nearly
16,000 vacation rental properties. ResortQuest also is the first branded vacation rental, property management and
real estate sales company to offer online booking through ResortQuest.com.
ResortQuest's current locations include Gulf Shores, Ala.; Phoenix, Scottsdale and Tucson, Ariz.; Palm Desert and
Palm Springs, Calif.; Aspen, Breckenridge, Crested Butte, Dillon, Snowmass Village and Telluride, Colo.; Bethany
Beach, Del.; Captiva Island, Destin, Ft. Myers, Ft. Walton Beach, Okaloosa Island, Orlando and Sanibel Island,
Fla.; St. Simons Island, Ga.; Hawaii, Maui, Oahu, and Kauai, Hawaii; Nantucket, Mass.; Big Sky, Mont.; the Outer
Banks of North Carolina; Lake Erie Islands, Ohio; Sunriver, Ore.; Hilton Head Island, S.C.; Deer Valley, Park City
and The Canyons, Utah; and Whistler, British Columbia.
The matters in this press release include "forward looking statements" within the meaning of the safe
harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934 and are qualified by cautionary statements contained herein and in ResortQuest International's filings with
the Securities and Exchange Commission.
ResortQuest International
Consolidated Condensed Statements of Pro Forma Income
(unaudited)
Second Quarter Ended Six Months Ended
June 30, June 30, June 30, June 30,
(in thousands) 1998 1999 1998 1999
------- ------- ------- -------
Revenues
Property management fees $12,004 $15,163 $28,440 $33,528
Service fees 7,350 9,972 13,449 17,689
Other 6,138 5,854 10,430 11,382
------- ------- ------- -------
Total revenues 25,492 30,989 52,319 62,599
------- ------- ------- -------
Operating expenses
Direct operating expenses 13,594 15,787 26,030 30,214
General and administrative
expenses 7,216 8,997 14,498 17,964
Depreciation and amortization 1,411 1,672 2,812 3,230
------- ------- ------- -------
Total operating expenses 22,221 26,456 43,340 51,408
------- ------- ------- -------
Operating income 3,271 4,533 8,979 11,191
Interest and other
income (expense) (661) (887) (1,253) (1,534)
------- ------- ------- -------
Income before income taxes 2,610 3,646 7,726 9,657
Provision for income taxes 1,325 1,677 3,603 4,359
------- ------- ------- -------
Net income $ 1,285 $ 1,969 $ 4,123 $ 5,298
======= ======= ======= =======
Net income per share
Basic $ 0.08 $ 0.11 $ 0.24 $ 0.30
======= ======= ======= =======
Diluted $ 0.07 $ 0.11 $ 0.24 $ 0.30
======= ======= ======= =======
Weighted average
shares outstanding
Basic 17,074 17,487 17,074 17,422
======= ======= ======= =======
Diluted 17,188 17,742 17,131 17,864
======= ======= ======= =======
ResortQuest International, Inc.
Performance Statistics
June 30, 1999
Three Months Ended
June 30, June 30, Change vs.
1999 1998 1998
------- ------- ----------
Mountain
Lodging Revenues(1) $3,617 $3,337 8.4%
Occupancy 19.5% 20.2% (0.7)pts
ADR $117.61 $102.47 14.8%
RevPAU $22.94 $20.72 10.7%
Total Units 1,935 1,969 (1.7)%
Beach
Lodging Revenues(1) $36,113 $32,787 10.1%
Occupancy 56.4% 59.5% (3.1)pts
ADR $161.38 $157.48 2.5%
RevPAU $91.05 $93.67 (2.8)%
Total Units 5,270 4,953 6.4%
Hawaii
Lodging Revenues(1) $30,578 $31,403 (2.6)%
Occupancy 70.4% 68.2% 2.2pts
ADR $97.04 $99.12 (2.1)%
RevPAU $68.34 $67.63 1.0%
Total Units 5,008 5,145 (2.7)%
Total
Lodging Revenues(1) $70,308 $67,527 4.1%
Occupancy 56.9% 57.2% (0.3)pts
ADR $123.43 $121.11 1.9%
RevPAU $70.19 $69.23 1.4%
Total Units 12,213 12,067 1.2%
ResortQuest International, Inc.
Performance Statistics
June 30, 1999
Six Months Ended
June 30, June 30, Change vs.
1999 1998 1998
------- ------- ----------
Mountain
Lodging Revenues(1) $25,908 $23,381 10.8%
Occupancy 45.6% 41.6% 4.0pts
ADR $176.76 $174.02 1.6%
RevPAU $80.65 $72.39 11.4%
Total Units 1,935 1,969 (1.7)%
Beach
Lodging Revenues(1) $52,604 $48,216 9.1%
Occupancy 56.9% 60.8% (3.9)pts
ADR $119.82 $114.87 4.3%
RevPAU $68.19 $69.89 (2.4)%
Total Units 5,270 4,953 6.4%
Hawaii
Lodging Revenues(1) $69,327 $71,517 (3.1)%
Occupancy 77.0% 73.4% 3.6pts
ADR $102.35 $106.67 (4.0)%
RevPAU $78.77 $78.29 0.6%
Total Units 5,008 5,145 (2.7)%
Total
Lodging Revenues(1) $147,839 $143,114 3.3%
Occupancy 64.0% 63.6% 0.4pts
ADR $117.06 $116.87 0.2%
RevPAU $74.94 $74.29 0.9%
Total Units 12,213 12,067 1.2%
(1) Lodging revenues are in thousands and represent the total rental
charged to property rental customers. Our revenue represents from
3% to over 40% of the lodging revenues based on the services
provided to us.
The above statistics exclude Houston & O'Leary, The Maury People,
Columbine, Ridgepine, Ryan's Golden Eagle, Cove Management Services,
Worthy Rentals, Scottsdale Resorts Accommodations, Shoreline
Properties, and Coates Reid & Waldron units of approximately 3,200.
Also excluded from these statistics are owner use nights and
renovation nights which were approximately 10.4% of gross available
nights in the three months ended June 30, 1999 and 11.1% of gross
available nights in the three months ended June 30, 1998. For the six
months ended June 30, 1999 and 1998, owner use nights and renovation
nights were 11.2% and 11.6% of gross available nights, respectively.
Daly Gray Public Relations, Northfield NJ
Jerry Daly and Carol McCune (Media)
609/383-1414
or
ResortQuest International, Memphis
Jeff Jarvis
901/762-0600