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Exhibit 99.1

 

 

INTERVAL LEISURE GROUP REPORTS FOURTH QUARTER AND FULL YEAR 2012 RESULTS

 

MIAMI, February 27, 2013 (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)

 

 

 

 

 

 

 

Quarter

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Over

 

Year Ended

 

Year

 

 

 

December 31,

 

Quarter

 

December 31,

 

Over Year

 

Metrics 

 

2012

 

2011

 

Change

 

2012

 

2011

 

Change

 

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

 

Year Over

 

 

 

December 31,

 

Year

 

Cash flow data

 

2012

 

2011

 

Change

 

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 income(1)

 

$

15,276

 

$

8,995

 

$

51,959

 

$

41,126

 

Adjusted earnings per share(1):

 

 

 

 

 

 

 

 

 

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.

 

6



 

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

 

 

7



 

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

 

 

8



 

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

%

 

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 item(1)

 

(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 item(1)

 

(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.

 

10



 

 

 

Three Months Ended December 31,

 

 

 

2012

 

2011

 

 

 

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

 

 

11



 

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.

 



 

SOURCE: Interval Leisure Group

 

Interval Leisure Group

Investor Contact:

Jennifer Klein, Investor Relations,

305-925-7302

Jennifer.Klein@iilg.com

 

Or

 

Media Contact:

Christine Boesch, Corporate Communications,

305-925-7267

Chris.Boesch@intervalintl.com