SUNTERRA ANNOUNCES RECORD FIRST QUARTER

Source: Sunterra

May 6, 1999
Sunterra Corporation (NYSE:OWN) yesterday announced record financial performance for the three months ended March 31, 1999. It also announced the completion this week of a $100 million securitization of its mortgages receivable.

First quarter 1999 net income increased by 38% to a record $10.0 million compared with net income of $7.3 million in the first quarter of 1998. First quarter 1999 earnings per diluted share increased 35% to $0.27 from $0.20 in the first quarter of 1998. Revenues increased by 27% to a record $114.3 million in the first quarter of 1999, up from $89.7 million in the first quarter of 1998.

L. Steven Miller, Sunterra's President and CEO, commented: "We are very pleased to report our eleventh consecutive quarter of record year-over-year growth in sales, income and earnings per share. Our business is strong, with consumer demand and awareness of vacation ownership increasing as we enter our strongest selling season between now and the end of Summer.

"One of the significant aspects of the first quarter is the roll out of our points-based clubs, which accounted for fully 48% of Vacation Interests sales in the first quarter of 1999.

"Our European and Sunterra Pacific clubs, which have been operating on points-based systems for some time, accounted for 28% of our Vacation Interests sales in the first quarter. Our new club in Japan accounted for another 2% of Vacation Interests sales.

"Club Sunterra, introduced in the fourth quarter of 1998 at seven of our North American resorts, accounted for 18% of our Vacation Interests sales. (The remaining North American resorts continued to sell Vacation Intervals during the first quarter.)

The $16.7 million in Club Sunterra revenues generated by these seven resorts in the first quarter represents that, from a sales perspective, we're about one-quarter of the way to our goal of fully rolling out our points-based system by the end of the year."

Sunterra Corporation is the largest international owner and manager of vacation ownership resorts, with 89 resort locations around the world and more than 250,000 owner families. In addition, Sunterra manages condominium resorts in Hawaii. The Company's operations consist of (i) marketing and selling vacation interests, (ii) developing, acquiring and operating vacation ownership resorts, (iii) financing customers' purchases and (iv) providing resort rental, management and maintenance services.

This release contains forward-looking statements, which include Sunterra's expansion plans, future prospects and other forecasts and statements of expectations. Actual results may differ materially from those expressed in any forward looking statements made by Sunterra due to, among other things, factors related to the timing and terms of future acquisitions and the introduction of Club Sunterra, mortgages receivable financing, integration of acquired operating companies and resort properties and those factors identified in Sunterra's filings with the Securities and Exchange Commission, including those set forth in Parts I and II of Sunterra's Annual Report on Form 10-K for the year ended December 31, 1998, and current reports on Form 8-K.