TRENDWEST RESORTS ANNOUNCES FIRST QUARTER RESULTS

Press Release: TrendWest

May 5, 1999
Trendwest Resorts Inc. (Nasdaq:TWRI), one of the nation's leading timeshare companies, Monday reported net income of $8.1 million, or $0.47 per diluted share, for its first quarter ended March 31, 1999.
This compares with net income of $5.9 million or $.33 per diluted share for the same period last year. Reported net income includes an after-tax gain of $.5 million from the sale of the Company's Bellevue corporate headquarters building. Excluding this item, net income would have been $7.6 million or $.44 per diluted share.

Net income for the quarter reflects a significantly higher effective tax rate than in the 1998 period, which resulted from an increased presence in states with higher income tax rates. Upgrade Sales were $7.1 million for the quarter, compared with $6.1 million a year ago. The average price per Vacation Credit sold increased to $1.32 per credit, versus $1.26 per credit for the same period last year, reflecting a price increase that went into effect June 29, 1998.

Vacation Credit cost of sales as a percentage of Vacation Credit sales for the first quarter increased slightly to 27.8%, compared to 27.2% for the same period last year. Sales and marketing costs as a percentage of Vacation Credit sales for the first quarter decreased to 48.0%, compared with 50.4% for the same period last year.

This decrease reflects the changes made to the sales commission program in mid 1998, as well as raised performance targets for additional sales bonuses. General and administrative expenses were 9.0% of total revenue for the first quarter of 1999, compared to 8.9% for the 1998 period.

During the first quarter of 1999, the Company transferred 46 units to WorldMark, The Club. The Company achieved total revenues of $59.9 million for the quarter, compared to $42.8 million for the same period last year, an increase of 40.0% due primarily to an increase in Vacation Credits. Vacation Credit sales for the first quarter increased 40.4% to $49.0 million, compared with $34.9 million for the first quarter last year or 37.0 million credits for the first quarter of 1999 versus 27.1 million credits for the same period last year.

Finance income for the quarter increased 25.0% to $4.0 million, compared with $3.2 million for the first quarter of 1998, primarily due to increased carrying balances of Notes Receivable. Gains on sales of Notes Receivable for the quarter increased 22.2% to $4.4 million, from $3.6 million in the first quarter of 1998.

In mid April 1999, the Company exercised an option to purchase 84 units at Depoe Bay on the Oregon Coast. This was a very desirable acquisition because of high Owner demand for this area. However, because the property carries a higher than normal product cost, the Company is selling 29 units of the resort under a "13th share" fractional sales program that incurs substantially lower sales and marketing costs.

The lower sales and marketing costs should largely offset the higher product costs, resulting in approximately the same operating income as compared to selling the units under the credit or points-based system. The Company anticipates selling out the 377 fractional interests, at an estimated average net sales price of $35,500 per interest, by the end of the third quarter.

Trendwest Resorts, Inc., is a leader in the timeshare industry. Through its exclusive relationship with WorldMark, The Club, the Company provides a flexible vacation ownership system, based on use of Vacation Credits, to approximately 72,000 Owners through 1,318 condominium units at 26 locations in the continental Western United States, Hawaii, British Columbia and Mexico. The Company's and WorldMark's addresses on the World Wide Web are www.trendwestresorts.com and www.worldmarktheclub.com.

Statements herein contain forward-looking information concerning the Company's future prospects and other forecasts and statements of expectations. Actual results may differ materially from those expressed in the forward looking statements made by the Company due to, among other things, the Company's ability to develop or acquire additional resort properties, find acceptable debt or equity capital to fund such development, achieve planned sales levels, as well as other risk factors described in the Company's SEC reports and filings.