MIAMI--(BUSINESS WIRE)--Interval Leisure Group (Nasdaq: IILG) ("ILG") today announced results for the three months and full year ended December 31, 2012.
FOURTH QUARTER AND FULL YEAR 2012 HIGHLIGHTS
- ILG consolidated fourth quarter revenue increased by 11.2% from the same period last year, while full year revenue increased by 10.4%.
- The Company generated fourth quarter diluted earnings per share of $0.27, up 68.8% from the prior year period. Full year adjusted diluted earnings per share were $0.91, an increase of 28.2% year-over-year.
- Interval Network member count increased 2.4% over last year. Full year total transaction revenue was higher by 3.2% year-over-year.
- Fourth quarter Management and Rental segment revenue increased by 47.8%. Full year Management and Rental revenue increased by 45.7%. Segment adjusted EBITDA rose by 87.6% year-over-year.
- ILG declared its first regular quarterly dividend in March 2012. During 2012, ILG paid $28.4 million, or fifty cents per share in dividends, including the acceleration of first quarter 2013.
- Free cash flow was $65.4 million for 2012.
"Interval Leisure Group has made significant progress in expanding its role in the shared ownership market. We are pleased with the more than 10% growth in consolidated revenue, as this is more than twice the top line growth we saw in 2011. Additionally, adjusted EBITDA increased by 4.1% for the full year," said Craig M. Nash, Chairman, President and Chief Executive Officer of Interval Leisure Group. "We remain focused on deploying capital through strategic transactions as we continue to execute on our long-term strategy.”
Financial Summary & Operating Metrics (USD in millions except per share amounts)
|
Three Months Ended December 31, |
Quarter Over Quarter Change |
Year Ended December 31, |
Year Over Year Change |
|||||||||
| Metrics | 2012 | 2011 | 2012 | 2011 | ||||||||
| Revenue | 110.7 | 99.5 | 11.2% | 473.3 | 428.8 | 10.4% | ||||||
| Membership and Exchange revenue | 81.0 | 79.4 | 2.0% | 357.7 | 349.4 | 2.4% | ||||||
| Management and Rental revenue | 29.7 | 20.1 | 47.8% | 115.6 | 79.4 | 45.7% | ||||||
| Gross profit | 70.3 | 65.7 | 7.0% | 305.1 | 287.4 | 6.2% | ||||||
| Net income attributable to common stockholders | 15.3 | 9.0 | 69.8% | 40.7 | 41.1 | (1.0)% | ||||||
| Adjusted net income* | 15.3 | 9.0 | 69.8% | 52.0 | 41.1 | 26.3% | ||||||
| Diluted EPS | $0.27 | $0.16 | 68.8% | $0.71 | $0.71 | 0.0% | ||||||
| Adjusted diluted EPS* | $0.27 | $0.16 | 68.8% | $0.91 | $0.71 | 28.2% | ||||||
| Adjusted EBITDA* | 34.0 | 33.4 | 1.7% | 157.2 | 151.0 | 4.1% | ||||||
| Balance sheet data | December 31, 2012 | December 31, 2011 | ||||||||||
| Cash and cash equivalents | 101.2 | 195.5 | ||||||||||
| Debt | 260.0 | 340.1 | ||||||||||
|
Year Ended
December 31, |
Year Over Year Change |
|||||||||||
| Cash flow data | 2012 | 2011 | ||||||||||
| Net cash provided by operating activities | 80.4 | 95.9 | (16.1)% | |||||||||
| Free cash flow* | 65.4 | 82.9 | (21.1)% | |||||||||
* “Adjusted net income”, “Adjusted diluted EPS”, “Adjusted EBITDA” and “Free cash flow” are non-GAAP measures as defined by the Securities and Exchange Commission (the “SEC”). Please see “Presentation of Financial Information,” “Glossary of Terms” and “Reconciliations of Non-GAAP Measures” below for an explanation of non-GAAP measures used throughout this release.
DISCUSSION OF RESULTS
Fourth Quarter 2012 Consolidated Operating Results
Consolidated revenue for the quarter ended December 31, 2012 was $110.7 million, an increase of 11.2% compared to the fourth quarter of 2011.
Net income attributable to common stockholders for the three months ended December 31, 2012 was $15.3 million, an increase of $6.3 million from $9.0 million for the same period of 2011. Net income growth for the 2012 period reflects higher pre-tax income of $11.6 million primarily resulting from an improvement in gross profit of $4.6 million and lower interest expense of $7.0 million due to the early extinguishment and refinancing of our indebtedness in September 2012. Diluted earnings per share (EPS) were $0.27 compared to diluted EPS of $0.16 for the same period of 2011.
Adjusted EBITDA for the quarter ended December 31, 2012 of $34.0 million includes the results of Vacation Resorts International (VRI) acquired in February 2012 and compares to $33.4 million for the same period of 2011.
Full Year 2012 Consolidated Operating Results
Consolidated revenue for the year ended December 31, 2012 was $473.3 million, an increase of 10.4% from $428.8 million for 2011. The increase was largely driven by incremental revenue contribution from our Management and Rental segment, primarily resulting from the inclusion of VRI.
Net income attributable to common stockholders for the year ended December 31, 2012 was $40.7 million or $0.71 of diluted EPS, compared to $41.1 million or $0.71 for the same period of 2011. Net income for full year 2012 reflects an $18.5 million non-cash, pre-tax loss associated with the early extinguishment of our indebtedness. Excluding the impact of this non-cash loss, adjusted net income for 2012 was $52.0 million, an increase of 26.3% year-over-year, and adjusted diluted EPS were $0.91 for full year 2012 compared to diluted EPS of $0.71 in 2011.
The year-over-year increase in adjusted net income was driven by higher pre-tax income of $17.4 million, which excludes the $18.5 million non-cash loss on extinguishment of debt, primarily resulting from a rise in gross profit of $17.7 million, or 6.2%, and lower amortization of intangibles and interest expense, partly offset by unfavorable non-operating foreign currency fluctuations of $4.0 million primarily as a result of our foreign subsidiaries holding U.S dollar denominated cash balances.
Adjusted EBITDA was $157.2 million for the year ended December 31, 2012, compared to $151.0 million in 2011.
Business Segment Results
Membership and Exchange
Membership and Exchange segment revenue for the three months and year ended December 31, 2012, was $81.0 million and $357.7 million, respectively. For the full year 2012, Interval Network membership fee and transaction revenue were $130.8 million and $198.4 million, respectively, representing increases of 1.0% and 3.2%, respectively, over the prior year. Year-over-year, average revenue per member decreased to $41.30, or 1.8%, in the fourth quarter and was flat for the full year, primarily reflecting a shift in membership mix to include a greater percentage of corporate members.
At December 31, 2012, the Membership and Exchange segment had approximately two million members enrolled in its various membership programs. The Interval Network had approximately 1.82 million active members, an increase of 2.4% from December 31, 2011.
Membership and Exchange adjusted EBITDA was $30.7 million and $142.6 million in the fourth quarter and full year 2012, respectively, representing decreases of 1.8% and 0.4% from the segment's adjusted EBITDA of $31.3 million and $143.2 million in the fourth quarter and full year 2011, respectively.
Throughout 2012, Interval renewed strategic agreements with key clients and affiliated 81 vacation ownership resorts in domestic and international markets. In 2012, over 73% of all new affiliations were located in non-US locations. Membership mix as of December 31, 2012 included 62% traditional and 38% corporate members, compared to 68% and 32%, respectively, as of December 31, 2011.
Management and Rental
Management and Rental segment revenue for the three months and year ended December 31, 2012, was $29.7 million and $115.6 million, respectively, including $13.8 million and $54.9 million of management fee and rental revenue (defined below).
Year-over-year, management fee and rental revenue grew by 67.8% for the fourth quarter and 69.4% for the year ended December 31, 2012. The improvement was primarily driven by the incremental revenue contribution from VRI for the ten months of 2012 subsequent to our acquisition and higher revenue per available room ("RevPAR") at Aston. Aston RevPAR for the quarter ended December 31, 2012 was $125.58 compared to $111.82 for the same period in 2011, and for the year ended December 31, 2012 was $130.28 compared to $111.43 in 2011, resulting from both a higher average daily rate and improved occupancy rates.
Management and Rental segment adjusted EBITDA was $3.3 million in the fourth quarter of 2012, an increase of 53.3% from the prior year period. Management and Rental segment adjusted EBITDA for the full year 2012 was $14.6 million, an increase of 87.6% from adjusted EBITDA of $7.8 million for the same period in 2011.
CAPITAL RESOURCES AND LIQUIDITY
As of December 31, 2012, ILG's cash and cash equivalents totaled $101.2 million, compared to $195.5 million as of December 31, 2011. As of December 31, 2012, the Company's total debt outstanding was $260 million, compared to $340.1 million as of December 31, 2011.
For the year ended December 31, 2012, ILG’s net cash provided by operating activities was $80.4 million and free cash flow was $65.4 million, a decrease from the prior year period largely resulting from the timing of income tax payments and certain other payments made in connection with commercial agreements.
Net cash used in investing activities was $47.3 million, primarily related to our acquisition of VRI, additional investments in loans receivable and capital expenditures totaling $15.0 million, or 3.2% of revenue, primarily related to IT initiatives. These cash outflows were partly offset by the repayments of certain existing loans receivable.
Net cash used in financing activities was $131.8 million for the year ended December 31, 2012 and mainly related to the extinguishment and refinancing of our indebtedness and our quarterly dividend payments.
Dividend
ILG declared its first regular quarterly dividend in March 2012. For the full year 2012, ILG paid $28.4 million, or fifty cents per share in dividends, including an accelerated dividend payment of $0.10 per share that otherwise would have been paid in the first quarter of 2013.
PRESENTATION OF FINANCIAL INFORMATION
ILG management believes that the presentation of non-generally accepted accounting principles (non-GAAP) financial measures, including, among others, EBITDA, adjusted EBITDA, adjusted net income, adjusted basic and diluted EPS and free cash flow, serves to enhance the understanding of ILG's performance. These non-GAAP financial measures should be considered in addition to and not as substitutes for, or superior to, measures of financial performance prepared in accordance with U.S. generally accepted accounting principles (GAAP). In addition, adjusted EBITDA (with certain additional add-backs) is used to calculate compliance with certain financial covenants in ILG's credit agreement. Management believes that these non-GAAP measures improve the transparency of our disclosures, provide meaningful presentations of our results from our business operations excluding the impact of certain items not related to our core business operations and improve the period to period comparability of results from business operations. These measures may also be useful in comparing our results to those of other companies; however, our calculations may differ from the calculations of these measures used by other companies. More information about the non-GAAP financial measures, including reconciliations of GAAP results to the non-GAAP measures, is available in the financial tables that accompany this press release.
CONFERENCE CALL
ILG will host a conference call today at 4:30 p.m. Eastern Daylight Time to discuss its results for the fourth quarter and full year 2012, with access via the Internet and telephone. Investors and analysts may participate in the live conference call by dialing (888) 396-2298 (toll-free domestic) or (617) 847-8708 (international); participant pass code: 64691967. Please register at least 10 minutes before the conference call begins. A replay of the call will be available for fourteen days via telephone starting approximately two hours after the call ends. The replay can be accessed at (888) 286-8010 (toll-free domestic) or (617) 801-6888 (international); pass code: 10687913. The webcast will be archived on Interval Leisure Group’s website for 90 days after the call. A transcript of the call will also be available on the website.
ABOUT INTERVAL LEISURE GROUP
Interval Leisure Group (ILG) is a leading global provider of membership and leisure services to the vacation industry. Headquartered in Miami, Florida, ILG has approximately 3,800 employees worldwide.
The company’s primary operating segment is Membership and Exchange, which offers travel and leisure related products and services to about 2 million member families who are enrolled in various programs. Interval International, the segment’s principal business, has been a leader in vacation ownership exchange since 1976. With offices in 16 countries, it operates the Interval Network of nearly 2,800 resorts in more than 75 nations. ILG delivers additional opportunities for vacation ownership exchange through its Trading Places International (TPI) and Preferred Residences networks.
ILG also has a Management and Rental operating segment that includes Aston Hotels & Resorts, Vacation Resorts International (VRI), and TPI. These businesses provide hotel, condominium resort, timeshare resort, and homeowners’ association management, as well as rental services, to travelers and owners at more than 200 vacation properties, resorts and club locations throughout North America. More information about the Company is available at www.iilg.com.
FORWARD-LOOKING STATEMENTS
This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, relating to: our future financial performance, our business prospects and strategy, anticipated financial position, liquidity and capital needs and other similar matters. These forward-looking statements are based on management's current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
Actual results could differ materially from those contained in the forward-looking statements included herein for a variety of reasons, including, among others: adverse trends in economic conditions generally or in the vacation ownership, vacation rental and travel industries; adverse changes to, or interruptions in, relationships with third parties; lack of available financing for, or insolvency of developers; consolidation of developers; decreased demand from prospective purchasers of vacation interests; travel related health concerns; changes in our senior management; regulatory changes; our ability to compete effectively and successfully add new products and services; our ability to successfully manage and integrate acquisitions; impairment of assets; the restrictive covenants in our revolving credit facility; adverse events or trends in key vacation destinations; business interruptions in connection with the rearchitecture of our technology systems; ability of managed homeowners associations to collect sufficient maintenance fees; third parties not repaying advances or extensions of credit; and our ability to expand successfully in international markets and manage risks specific to international operations. Certain of these and other risks and uncertainties are discussed in our filings with the SEC. Other unknown or unpredictable factors that could also adversely affect our business, financial condition and results of operations may arise from time to time. In light of these risks and uncertainties, the forward-looking statements discussed in this release may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking statements, which only reflect the views of our management as of the date of this press release. Except as required by applicable law, ILG does not undertake to update these forward-looking statements.
| INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES | ||||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenue | $ | 110,737 | $ | 99,544 | $ | 473,339 | $ | 428,794 | ||||||||
| Cost of sales | 40,466 | 33,856 | 168,259 | 141,420 | ||||||||||||
| Gross profit | 70,271 | 65,688 | 305,080 | 287,374 | ||||||||||||
| Selling and marketing expense | 12,236 | 12,289 | 53,559 | 53,504 | ||||||||||||
| General and administrative expense | 26,238 | 22,777 | 105,270 | 94,508 | ||||||||||||
| Amortization expense of intangibles | 2,040 | 6,853 | 23,041 | 27,301 | ||||||||||||
| Depreciation expense | 3,590 | 3,271 | 13,429 | 13,277 | ||||||||||||
| Operating income | 26,167 | 20,498 | 109,781 | 98,784 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 254 | 443 | 1,792 | 1,263 | ||||||||||||
| Interest expense | (1,755 | ) | (8,707 | ) | (25,629 | ) | (35,575 | ) | ||||||||
| Other income (expense), net | (48 | ) | 822 | (2,456 | ) | 1,580 | ||||||||||
| Loss on extinguishment of debt | - | - | (18,527 | ) | - | |||||||||||
| Total other expense, net | (1,549 | ) | (7,442 | ) | (44,820 | ) | (32,732 | ) | ||||||||
| Earnings before income taxes and noncontrolling interest | 24,618 | 13,056 | 64,961 | 66,052 | ||||||||||||
| Income tax provision | (9,341 | ) | (4,062 | ) | (24,252 | ) | (24,926 | ) | ||||||||
| Net income | 15,277 | 8,994 | 40,709 | 41,126 | ||||||||||||
| Net loss (income) attributable to noncontrolling interest | (1 | ) | 1 | (7 | ) | - | ||||||||||
| Net income attributable to common stockholders | $ | 15,276 | $ | 8,995 | $ | 40,702 | $ | 41,126 | ||||||||
| Earnings per share attributable to common stockholders: | ||||||||||||||||
| Basic | $ | 0.27 | $ | 0.16 | $ | 0.72 | $ | 0.72 | ||||||||
| Diluted | $ | 0.27 | $ | 0.16 | $ | 0.71 | $ | 0.71 | ||||||||
| Weighted average number of common stock outstanding: | ||||||||||||||||
| Basic | 56,854 | 56,019 | 56,549 | 56,981 | ||||||||||||
| Diluted | 57,632 | 56,844 | 57,248 | 57,775 | ||||||||||||
| Dividends declared per share of common stock | $ | 0.20 | $ | - | $ | 0.50 | $ | - | ||||||||
| Adjusted net income1 | $ | 15,276 | $ | 8,995 | $ | 51,959 | $ | 41,126 | ||||||||
| Adjusted earnings per share1: | ||||||||||||||||
| Basic | $ | 0.27 | $ | 0.16 | $ | 0.92 | $ | 0.72 | ||||||||
| Diluted | $ | 0.27 | $ | 0.16 | $ | 0.91 | $ | 0.71 | ||||||||
| 1 "Adjusted net income" and "adjusted earnings per share" are non-GAAP measures as defined by the SEC. Please see "Reconciliations of Non-GAAP Measures" for a reconciliation to the comparable GAAP measure. | ||||||||||||||||
| INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In thousands) | ||||||||
|
As of
December 31, |
||||||||
| 2012 | 2011 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 101,162 | $ | 195,517 | ||||
| Deferred membership costs | 12,349 | 12,461 | ||||||
| Prepaid income taxes | 12,973 | 2,245 | ||||||
| Other current assets | 83,011 | 75,416 | ||||||
| Total current assets | 209,495 | 285,639 | ||||||
| Goodwill and intangible assets, net | 604,452 | 586,796 | ||||||
| Deferred membership costs | 11,058 | 13,331 | ||||||
| Other non-current assets | 81,915 | 90,556 | ||||||
| TOTAL ASSETS | $ | 906,920 | $ | 976,322 | ||||
| LIABILITIES AND EQUITY | ||||||||
| LIABILITIES: | ||||||||
| Accounts payable, trade | $ | 11,086 | $ | 11,905 | ||||
| Deferred revenue | 93,367 | 91,214 | ||||||
| Other current liabilities | 70,950 | 74,891 | ||||||
| Total current liabilities | 175,403 | 178,010 | ||||||
| Long-term debt | 260,000 | 340,113 | ||||||
| Deferred revenue | 111,273 | 119,772 | ||||||
| Other long-term liabilities | 87,752 | 89,323 | ||||||
| Redeemable noncontrolling interest | 426 | 419 | ||||||
| TOTAL STOCKHOLDERS' EQUITY | 272,066 | 248,685 | ||||||
| TOTAL LIABILITIES AND EQUITY | $ | 906,920 | $ | 976,322 | ||||
| INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (In thousands) | ||||||||
| Year Ended December 31, | ||||||||
| 2012 | 2011 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 40,709 | $ | 41,126 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Amortization expense of intangibles | 23,041 | 27,301 | ||||||
| Amortization of debt issuance costs | 1,376 | 1,806 | ||||||
| Depreciation expense | 13,429 | 13,277 | ||||||
| Accretion of original issue discount | 1,840 | 2,538 | ||||||
| Non-cash compensation expense | 10,931 | 11,636 | ||||||
| Non-cash interest expense | 433 | 464 | ||||||
| Non-cash interest income | (850 | ) | - | |||||
| Deferred income taxes | 6,507 | 1,015 | ||||||
| Excess tax benefits from stock-based awards | (3,017 | ) | (1,271 | ) | ||||
| Gain on disposal of property and equipment | (256 | ) | - | |||||
| Loss on extinguishment of debt | 18,527 | - | ||||||
| Change in fair value of contingent consideration | (544 | ) | 1,159 | |||||
| Changes in assets and liabilities | (31,688 | ) | (3,144 | ) | ||||
| Net cash provided by operating activities | 80,438 | 95,907 | ||||||
| Cash flows from investing activities: | ||||||||
| Acquisition, net of cash acquired | (39,963 | ) | - | |||||
| Capital expenditures | (15,040 | ) | (13,038 | ) | ||||
| Investment in financing receivables | (9,480 | ) | (16,536 | ) | ||||
| Payments received on financing receivables | 16,989 | - | ||||||
| Proceeds from disposal of property and equipment | 230 | - | ||||||
| Acquisition of assets | - | (5,600 | ) | |||||
| Net cash used in investing activities | (47,264 | ) | (35,174 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Principal payments on term loan | (56,000 | ) | (20,000 | ) | ||||
| Redemption of senior notes | (300,000 | ) | - | |||||
| Borrowings on revolving credit facility | 290,000 | - | ||||||
| Payments on revolving credit facility | (30,000 | ) | - | |||||
| Payments of debt issuance costs | (3,912 | ) | - | |||||
| Treasury stock purchases | - | (20,913 | ) | |||||
| Dividend payments | (28,366 | ) | - | |||||
| Other, net | (3,563 | ) | (2,642 | ) | ||||
| Net cash used in financing activities | (131,841 | ) | (43,555 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 4,312 | (2,163 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | (94,355 | ) | 15,015 | |||||
| Cash and cash equivalents at beginning of period | 195,517 | 180,502 | ||||||
| Cash and cash equivalents at end of period | $ | 101,162 | $ | 195,517 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Interest, net of amounts capitalized | $ | 31,363 | $ | 30,603 | ||||
| Income taxes, net of refunds | $ | 25,693 | $ | 17,068 | ||||
| OPERATING STATISTICS | ||||||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| 2012 | % Change | 2011 | 2012 | % Change | 2011 | |||||||||||||||||||||
| Membership and Exchange | ||||||||||||||||||||||||||
| Total active members at end of period (000's) | 1,824 | 2.4 | % | 1,780 | 1,824 | 2.4 | % | 1,780 | ||||||||||||||||||
| Average revenue per member | $ | 41.30 | (1.8 | )% | $ | 42.05 | $ | 182.39 | (0.2 | )% | $ | 182.71 | ||||||||||||||
| Management and Rental | ||||||||||||||||||||||||||
| Available room nights (000's) | 371 | (2.3 | )% | 380 | 1,497 | (2.6 | )% | 1,537 | ||||||||||||||||||
| RevPAR | $ | 125.58 | 12.3 | % | $ | 111.82 | $ | 130.28 | 16.9 | % | $ | 111.43 | ||||||||||||||
| ADDITIONAL DATA | ||||||||||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||
| 2012 | % Change | 2011 | 2012 | % Change | 2011 | |||||||||||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||
| Membership and Exchange | ||||||||||||||||||||||||||
| Transaction revenue | $ | 41,612 | 0.4 | % | $ | 41,432 | $ | 198,434 | 3.2 | % | $ | 192,297 | ||||||||||||||
| Membership fee revenue | 33,133 | 3.0 | % | 32,169 | 130,784 | 1.0 | % | 129,477 | ||||||||||||||||||
| Ancillary member revenue | 1,434 | (2.6 | )% | 1,472 | 6,976 | (5.4 | )% | 7,371 | ||||||||||||||||||
| Total member revenue | 76,179 | 1.5 | % | 75,073 | 336,194 | 2.1 | % | 329,145 | ||||||||||||||||||
| Other revenue | 4,828 | 10.9 | % | 4,353 | 21,538 | 6.2 | % | 20,282 | ||||||||||||||||||
| Total revenue | $ | 81,007 | 2.0 | % | $ | 79,426 | $ | 357,732 | 2.4 | % | $ | 349,427 | ||||||||||||||
| Management and Rental | ||||||||||||||||||||||||||
| Management fee and rental revenue | $ | 13,781 | 67.8 | % | $ | 8,211 | $ | 54,946 | 69.4 | % | $ | 32,441 | ||||||||||||||
| Pass-through revenue | 15,949 | 33.9 | % | 11,907 | 60,661 | 29.3 | % | 46,926 | ||||||||||||||||||
| Total revenue | $ | 29,730 | 47.8 | % | $ | 20,118 | $ | 115,607 | 45.7 | % | $ | 79,367 | ||||||||||||||
| Management and Rental gross margin | 29.4 | % | 17.3 | % | 25.1 | % | 30.5 | % | 22.4 | % | 24.9 | % | ||||||||||||||
| Management and Rental gross margin without Pass-through Revenue | 63.5 | % | 3.3 | % | 61.5 | % | 64.1 | % | 5.2 | % | 60.9 | % | ||||||||||||||
| RECONCILIATIONS OF NON-GAAP MEASURES | |||||||||||||||
| Year Ended December 31, | |||||||||||||||
| 2012 | % Change | 2011 | |||||||||||||
| (Dollars in thousands) | |||||||||||||||
| Net cash provided by operating activities | $ | 80,438 | (16.1)% | $ | 95,907 | ||||||||||
| Less: Capital expenditures | (15,040 | ) | 15.4% | (13,038 | ) | ||||||||||
| Free cash flow | $ | 65,398 | (21.1)% | $ | 82,869 | ||||||||||
| Year Ended December 31, | |||||||||||||||
| 2012 | 2011 | ||||||||||||||
| (Dollars in thousands) | |||||||||||||||
| Net income attributable to common stockholders | $ | 40,702 | $ | 41,126 | |||||||||||
| Loss on extinguishment of debt | 18,527 | - | |||||||||||||
| Income tax benefit of adjusting item1 | (7,270 | ) | - | ||||||||||||
| Adjusted net income | $ | 51,959 | $ | 41,126 | |||||||||||
| Year Ended December 31, | |||||||||||||||
| 2012 | 2011 | ||||||||||||||
| Basic | Diluted | Basic | Diluted | ||||||||||||
| Earnings per share | $ | 0.72 | $ | 0.71 | $ | 0.72 | $ | 0.71 | |||||||
| Loss on extinguishment of debt | 0.33 | 0.33 | - | - | |||||||||||
| Income tax benefit of adjusting item1 | (0.13 | ) | (0.13 | ) | - | - | |||||||||
| Adjusted earnings per share | $ | 0.92 | $ | 0.91 | $ | 0.72 | $ | 0.71 | |||||||
| 1 Tax rate utilized is the applicable effective tax rate respective to the period to the extent amounts are deductible. | |||||||||||||||
| Three Months Ended December 31, | ||||||||||||||||||||||||||||||
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2012 |
2011 |
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Membership
and Exchange |
Management
and Rental |
Consolidated |
Membership
and Exchange |
Management
and Rental |
Consolidated | |||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 30,726 | $ | 3,269 | $ | 33,995 | $ | 31,285 | $ | 2,133 | 33,418 | |||||||||||||||||||
| Non-cash compensation expense | (1,949 | ) | (249 | ) | (2,198 | ) | (2,562 | ) | (234 | ) | (2,796 | ) | ||||||||||||||||||
| Other non-operating income (expense), net | (44 | ) | (4 | ) | (48 | ) | 823 | (1 | ) | 822 | ||||||||||||||||||||
| EBITDA | 28,733 | 3,016 | 31,749 | 29,546 | 1,898 | 31,444 | ||||||||||||||||||||||||
| Amortization expense of intangibles | (339 | ) | (1,701 | ) | (2,040 | ) | (5,420 | ) | (1,433 | ) | (6,853 | ) | ||||||||||||||||||
| Depreciation expense | (3,269 | ) | (321 | ) | (3,590 | ) | (3,045 | ) | (226 | ) | (3,271 | ) | ||||||||||||||||||
| Less: Other non-operating income (expense), net | 44 | 4 | 48 | (823 | ) | 1 | (822 | ) | ||||||||||||||||||||||
| Operating income | $ | 25,169 | $ | 998 | 26,167 | $ | 20,258 | $ | 240 | 20,498 | ||||||||||||||||||||
| Interest income | 254 | 443 | ||||||||||||||||||||||||||||
| Interest expense | (1,755 | ) | (8,707 | ) | ||||||||||||||||||||||||||
| Other non-operating income (expense), net | (48 | ) | 822 | |||||||||||||||||||||||||||
| Income tax provision | (9,341 | ) | (4,062 | ) | ||||||||||||||||||||||||||
| Net income | 15,277 | 8,994 | ||||||||||||||||||||||||||||
| Net loss (income) attributable to noncontrolling interest | (1 | ) | 1 | |||||||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 15,276 | $ | 8,995 | ||||||||||||||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||||||||||||
|
2012 |
2011 |
|||||||||||||||||||||||||||||
|
Membership
and Exchange |
Management
and Rental |
Consolidated |
Membership
and Exchange |
Management
and Rental |
Consolidated | |||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 142,590 | $ | 14,592 | $ | 157,182 | $ | 143,220 | $ | 7,778 | $ | 150,998 | ||||||||||||||||||
| Non-cash compensation expense | (9,904 | ) | (1,027 | ) | (10,931 | ) | (10,638 | ) | (998 | ) | (11,636 | ) | ||||||||||||||||||
| Other non-operating income (expense), net | (2,303 | ) | (153 | ) | (2,456 | ) | 1,705 | (125 | ) | 1,580 | ||||||||||||||||||||
| Loss on extinguishment of debt | (18,527 | ) | - | (18,527 | ) | - | - | - | ||||||||||||||||||||||
| EBITDA | 111,856 | 13,412 | 125,268 | 134,287 | 6,655 | 140,942 | ||||||||||||||||||||||||
| Amortization expense of intangibles | (16,147 | ) | (6,894 | ) | (23,041 | ) | (21,689 | ) | (5,612 | ) | (27,301 | ) | ||||||||||||||||||
| Depreciation expense | (12,294 | ) | (1,135 | ) | (13,429 | ) | (12,331 | ) | (946 | ) | (13,277 | ) | ||||||||||||||||||
| Less: Other non-operating income (expense), net | 2,303 | 153 | 2,456 | (1,705 | ) | 125 | (1,580 | ) | ||||||||||||||||||||||
| Less: Loss on extinguishment of debt | 18,527 | - | 18,527 | - | - | - | ||||||||||||||||||||||||
| Operating income | $ | 104,245 | $ | 5,536 | 109,781 | $ | 98,562 | $ | 222 | 98,784 | ||||||||||||||||||||
| Interest income | 1,792 | 1,263 | ||||||||||||||||||||||||||||
| Interest expense | (25,629 | ) | (35,575 | ) | ||||||||||||||||||||||||||
| Other non-operating income (expense), net | (2,456 | ) | 1,580 | |||||||||||||||||||||||||||
| Loss on extinguishment of debt | (18,527 | ) | - | |||||||||||||||||||||||||||
| Income tax provision | (24,252 | ) | (24,926 | ) | ||||||||||||||||||||||||||
| Net income | 40,709 | 41,126 | ||||||||||||||||||||||||||||
| Net income attributable to noncontrolling interest | (7 | ) | - | |||||||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 40,702 | $ | 41,126 | ||||||||||||||||||||||||||
GLOSSARY OF TERMS
Adjusted Diluted EPS - Adjusted Net Income divided by the weighted average number of shares of common stock and dilutive securities outstanding during the period.
Adjusted EBITDA - EBITDA, excluding, if applicable: (1) non-cash compensation expense, (2) goodwill and asset impairments and (3) other non-operating income and expense (including loss on extinguishment of debt). The Company's presentation of Adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.
Adjusted Net Income - Net income attributable to common stockholders excluding the non-cash loss on extinguishment of our indebtedness, net of tax.
Ancillary Member Revenue - Other Interval Network member related revenue including insurance and travel related services.
Available Room Nights - Number of nights available for rental by Aston at managed vacation properties during the period, which excludes all rooms under renovation.
Average Revenue per Member - Membership fee revenue, transaction revenue and ancillary member revenue for the Interval Network for the applicable period, divided by the monthly weighted average number of Interval Network active members during the applicable period.
EBITDA - Net income excluding, if applicable: (1) interest income and interest expense, (2) income taxes, (3) depreciation expense, and (4) amortization expense of intangibles.
Free Cash Flow - Cash provided by operating activities less capital expenditures.
Gross Lodging Revenue - Total room revenue collected from all Aston-managed occupied rooms during the period.
Management Fee and Rental Revenue – Represents revenue earned by our Management and Rental segment exclusive of pass-through revenue.
Pass-through Revenue - Represents the compensation and other employee-related costs directly associated with management of the properties and homeowner associations that are included in both revenue and cost of sales and that are passed on to the property owners and homeowner associations without mark-up. Management believes presenting gross margin without these expenses provides management and investors a relevant period-over-period comparison.
RevPAR - Gross Lodging Revenue divided by Available Room Nights during the period for Aston.
Total Active Members - Active members of the Interval Network as of the end of the period. Active members are members in good standing that have paid membership fees and any other applicable charges in full as of the end of the period or are within the allowed grace period.
Transaction Revenue – Interval Network transactional and service fees paid primarily for exchanges, Getaways, and reservation servicing.