Press Release
November 4, 1999
DALLAS, TX -- Silverleaf Resorts, Inc. (NYSE: SVR) yesterday reported financial results for the third quarter and
nine months ended September 30, 1999. Total revenues for the third quarter increased 37% to $61.8 million from
$45.2 million in the third quarter of 1998.
Vacation interval sales increased 32% to $50.7 million for the quarter ended September 30, 1999, from $38.4 million in the comparative prior year period. Upgrade sales accounted for approximately 27% of total VOI sales, a 60% increase in dollar volume compared with last year's third quarter. Sales at the Company's seven core resorts grew 25% and represented 61% of total VOI sales. New resorts' sales grew 44%, and accounted for 39% of total VOI sales. The number of units sold increased 9%, while the average sales price increased 13%.
``The Company experienced strong VOI sales throughout our system, demonstrating that our strategy for extending our model nationwide is working well. We were successful in selling the Silverleaf concept not only at our core resorts, but at properties serving such key markets as Chicago, Boston, New York, Atlanta, and St. Louis. As a result, the Company reported solid revenue for the quarter; and as we continue to leverage our new technology platform and implement call center staffing improvements, Silverleaf is positioned for long-term earnings growth,'' said Robert Mead, Silverleaf's Chairman and Chief Executive Officer.
``Silverleaf's focus this year has been on assimilating our rapid growth and building a stronger, more competitive company. Our initiatives in 1999 are the culmination of several years of dramatic expansion for our Company. As a result of those initiatives and our work during the past few years, Silverleaf has much greater diversity in its resorts, significant improvements in its infrastructure, properties, units, and amenities, and a more powerful marketing platform. We approach 2000 as a Company whose resorts have earned a growing reputation for the variety and high quality of vacation experiences they offer,'' Mead added. -more- EBITDA for the third quarter was $14.8 million, an increase of 27% from $11.6 million in the prior year comparative quarter. For the quarter ended September 30, 1999, net income was $5.4 million, or $0.42 per share, compared to $5.4 million, or $0.42 per share, in the third quarter of 1998. While revenue increased 37%, net income remained unchanged reflecting higher sales and marketing costs due to the rapid expansion of call center capacity as well as to the Company's expanding geographic presence.
For the nine months ended September 30, 1999, total revenues increased 41% to $167.9 million compared to $119.4 million in the comparative prior year period. Vacation interval sales for the nine months ended September 30, 1999 were $138.5 million, representing an increase of 35%, compared to $102.4 million for the nine months ended September 30, 1998. Net income increased 9% to $15.8 million from $14.5 million in the first nine months of 1999 compared to 1998. Diluted net income per share was $1.22, a 7% increase, compared to $1.14 per share for the first nine months of 1998.
Based in Dallas, Texas, Silverleaf Resorts, Inc. currently owns and/or operates 22 resorts in various stages of development. Silverleaf resorts offer a wide array of country club-like amenities, such as golf, swimming, horseback riding, boating, and many organized activities for children and adults. Silverleaf has a managed ownership base of over 90,000. Further information on the Company may be found on its website, www.silverleafresorts.com.
This release contains certain forward-looking statements which involve risks and uncertainties and actual results
may differ materially from those anticipated. The Company is subject to specific risks associated with the timeshare
industry, the regulatory environment, and various economic factors. Additionally, anticipated results are dependent
upon the Company's ability to identify and acquire or develop other operations under terms which are beneficial
to the Company and its shareholders. Other risk factors are more fully discussed under ``Cautionary Statements''
in the Company's SEC reports, including the Company's annual report on form 10K dated March 26, 1999 (pages 30
through 38).
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
-------------------- --------------------
Sept 30, Sept 30, Sept 30, Sept 30,
1999 1998 1999 1998
--------- --------- --------- ---------
Revenues:
Vacation Interval sales $ 50,706 $ 38,427 $ 138,480 $ 102,364
Sampler sales 1,475 682 4,217 1,685
--------- --------- --------- ---------
Total sales 52,181 39,109 142,697 104,049
Interest income 7,566 4,278 20,017 11,291
Management fee income 678 725 2,218 1,819
Other income 1,337 1,107 2,997 2,250
--------- --------- --------- ---------
Total revenues 61,762 45,219 167,929 119,409
Costs and Operating Expenses:
Cost of Vacation
Interval sales 7,826 5,605 21,183 16,154
Sales and marketing 26,864 19,260 72,177 47,692
Provision for
uncollectible notes 5,071 4,489 13,848 12,346
Operating, general and
administrative 6,345 3,485 17,399 10,123
Other expense 876 740 2,185 2,213
Depreciation and amortization 1,439 1,029 3,978 2,280
Interest expense 4,517 1,756 11,545 5,088
--------- --------- --------- ---------
Total costs and
operating expenses 52,938 36,364 142,315 95,896
Income before provision
for income taxes 8,824 8,855 25,614 23,513
Provision for income taxes 3,397 3,435 9,861 9,019
--------- --------- --------- ---------
Net Income $ 5,427 $ 5,420 $ 15,753 $ 14,494
========= ========= ========= =========
Basic net income
per common share $ 0.42 $ 0.42 $ 1.22 $ 1.16
========= ========= ========= =========
Diluted net income
per common share $ 0.42 $ 0.42 $ 1.22 $ 1.14
========= ========= ========= =========
Weighted average number of
basic shares outstanding 12,889,417 13,054,380 12,889,417 12,543,544
========== ========== ========== ==========
Weighted average number
of diluted shares
outstanding 12,889,417 13,054,380 12,889,417 12,664,871
========== ========== ========== ==========
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(Unaudited)
September 30, December 31,
1999 1998
------------ -----------
ASSETS
Cash and equivalents $ 8,026 $ 11,355
Restricted cash 903 873
Notes receivable, net 258,499 173,959
Amounts due from affiliates 8,581 4,115
Inventories 97,236 71,694
Land, equipment, buildings,
and utilities, net 48,501 34,025
Prepaid and other assets 16,492 16,899
--------- ---------
TOTAL ASSETS $ 438,238 $ 312,920
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 15,424 $ 8,144
Unearned revenues 7,412 4,082
Deferred and current income taxes, net 28,096 25,660
Notes payable and capital
lease obligations 154,627 58,108
Senior subordinated notes 75,000 75,000
--------- ---------
Total Liabilities 280,559 170,994
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, par value $0.01 per share,
100,000,000 shares authorized,
13,311,517 shares issued and 12,889,417
shares outstanding at September 30,
1999 and December 31, 1998 133 133
Additional paid-in capital 109,339 109,339
Retained earnings 53,206 37,453
Treasury stock (422,100 shares) (4,999) (4,999)
--------- ---------
Total Shareholders' Equity 157,679 141,926
--------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 438,238 $ 312,920
========= =========
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED SELECTED FINANCIAL DATA
(dollars in thousands, except average price data)
(Unaudited)
As of and for the Quarter Ended
--------------------------------------------
9/30/99 6/30/99 3/31/99 12/31/98 9/30/98
-------- -------- -------- -------- --------
FINANCIAL DATA:
Earnings Before Interest
expense, Provision for
Income Taxes, and
Depreciation and
Amortization expense
("EBITDA") $ 14,780 $ 13,985 $ 12,372 $ 9,410 $ 11,640
Gross notes receivable $287,517 $254,766 $222,615 $197,906 $175,851
Allowance for
uncollectible notes $ 29,018 $ 26,343 $ 24,533 $ 23,947 $ 20,590
Delinquency percentage
(overall) (90 day basis) 9.3% 9.1% 10.5% 11.0% 8.9%
OPERATING DATA:
Number of Vacation Intervals
sold (excluding upgrades) 3,948 4,031 3,879 3,283 3,608
Number of upgraded
Vacation Intervals sold 3,152 2,762 2,248 1,570 1,891
Average price of Vacation
Intervals sold
(excluding upgrades) $ 9,357 $ 8,532 $ 8,146 $ 8,045 $ 8,265
Average price of upgraded
Vacation Intervals sold $ 4,367 $ 4,364 $ 4,329 $ 4,334 $ 4,551
Silverleaf Resorts, Inc.
Harry J. White, Jr., CFO
214/631-1166
or
Morgen-Walke Associates
Michele Katz/Michael Polyviou/Ian Hirsch
Press: Merridith Ingram/Stacey Reed
212/850-5600