ILG, LLC - FORM 8-K - EX-99.2 - February 24, 2015

Attached files

file	filename
8-K - 8-K - ILG, LLC	a15-5244_18k.htm
EX-99.1 - EX-99.1 - ILG, LLC	a15-5244_1ex99d1.htm

Exhibit 99.2

Interval Leisure Group Announces Changes in Financial Reporting Segments

MIAMI—(BUSINESS WIRE)—February 24, 2015— Interval Leisure Group (Nasdaq: IILG) (“ILG”) today announced it has made changes to its financial reporting segments to align with its reorganized management reporting structure as a result of the acquisition of Hyatt Vacation Ownership (HVO).

The new reporting segments are: Exchange and Rental, and Vacation Ownership.

Exchange and Rental offers access to vacation accommodations and other travel-related transactions and services to leisure travelers, by providing vacation exchange services and vacation rentals, working with resort developers and operating vacation rental properties.

The Exchange and Rental operating segment consists of Interval International (referred to as Interval), the Hyatt Residence Club, and Trading Places International (known as TPI) operated exchange business, as well as Aston Hotels & Resorts, Inc. (referred to as Aston) and Aqua Hospitality, LLC (referred to as Aqua).

Vacation Ownership engages in the management of vacation ownership resorts; sales, marketing, and financing of vacation ownership interests; and related services to owners and associations. The Vacation Ownership operating segment consists of the management related lines of business of Vacation Resorts International (known as VRI), TPI, VRI Europe and HVO as well as the sales and financing of vacation ownership interests.

As of December 31, 2014, financial results for the company will reflect the realigned segment structure. Included with this press release is re-cast financial information for the first, second and third quarters of 2014 as well as four quarters of 2013 consistent with these realigned segments.

The Company will release its results for the fourth quarter and fiscal year ending December 31, 2014 on February 26th at 4:00 pm Eastern Time.

Exchange and Rental Financial Information

	QTD			QTD			QTD			YTD
Exchange and Rental	3/31/2014			6/30/2014			9/30/2014			9/30/2014

Revenue	$	130,088		$	116,802		$	120,217		$	367,107
Cost of sales	49,025			44,782			44,186			137,993
Gross profit	81,063			72,020			76,031			229,114
Selling and marketing expense	14,432			13,824			14,641			42,897
General and administrative expense	24,719			25,540			25,334			75,593
Amortization expense of intangibles	1,829			1,751			1,739			5,319
Depreciation expense	3,611			3,694			3,587			10,892
Operating income	36,472			27,211			30,730			94,413
Amortization expense of intangibles	1,829			1,751			1,739			5,319
Depreciation expense	3,611			3,694			3,587			10,892
Net income attributable to noncontrolling interest	(18		)	—			(9		)	(27		)
Other non-operating income (expense), net	17			(279		)	535			273
EBITDA	41,911			32,377			36,582			110,870
Non-cash compensation expense	2,479			2,261			2,423			7,163
Acquisition related and restructuring costs	351			988			385			1,724
Less: Other non-operating income (expense), net	(17		)	279			(535		)	(273		)
Adjusted EBITDA	$	44,724		$	35,905		$	38,855		$	119,484

	QTD			QTD			QTD			QTD			YTD
Exchange and Rental	3/31/2013			6/30/2013			9/30/2013			12/31/2013			12/31/2013

Revenue	$	122,018		$	112,884		$	106,543		$	100,944		$	442,389
Cost of sales	39,292			36,338			34,881			35,051			145,562
Gross profit	82,726			76,546			71,662			65,893			296,827
Selling and marketing expense	13,609			14,106			12,794			12,591			53,100
General and administrative expense	21,996			23,738			23,156			25,013			93,903
Amortization expense of intangibles	1,266			1,266			1,291			1,303			5,126
Depreciation expense	3,577			3,611			3,417			3,529			14,134
Operating income	42,278			33,825			31,004			23,457			130,564
Amortization expense of intangibles	1,266			1,266			1,291			1,303			5,126
Depreciation expense	3,577			3,611			3,417			3,529			14,134
Net (income) loss attributable to noncontrolling interest	(6		)	1			(4		)	9			—
Other non-operating income (expense), net	(348		)	1,480			(70		)	(635		)	427
EBITDA	46,767			40,183			35,638			27,663			150,251
Non-cash compensation expense	2,414			2,418			2,440			2,469			9,741
Prior period item	—			(3,496		)	—			—			(3,496		)
Acquisition related and restructuring costs	212			(45		)	389			452			1,008
Less: Other non-operating income (expense), net	348			(1,480		)	70			635			(427		)
Adjusted EBITDA	$	49,741		$	37,580		$	38,537		$	31,219		$	157,077

Vacation Ownership Financial Information

	QTD			QTD			QTD			YTD
Vacation Ownership	3/31/2014			6/30/2014			9/30/2014			9/30/2014

Revenue	$	26,953		$	26,726		$	26,466		$	80,145
Cost of sales	14,826			14,979			14,808			44,613
Gross profit	12,127			11,747			11,658			35,532
Selling and marketing expense	136			(15		)	159			280
General and administrative expense	6,719			5,711			6,005			18,435
Amortization expense of intangibles	1,137			1,144			1,140			3,421
Depreciation expense	182			182			178			542
Operating income	3,953			4,725			4,176			12,854
Amortization expense of intangibles	1,137			1,144			1,140			3,421
Depreciation expense	182			182			178			542
Net income attributable to noncontrolling interest	(961		)	(1,034		)	(800		)	(2,795		)
Other non-operating expense, net	(153		)	(1		)	(24		)	(178		)
EBITDA	4,158			5,016			4,670			13,844
Non-cash compensation expense	368			371			395			1,134
Acquisition related and restructuring costs	887			181			457			1,525
Less: Other non-operating expense, net	153			1			24			178
Adjusted EBITDA	$	5,566		$	5,569		$	5,546		$	16,681

	QTD			QTD			QTD			QTD			YTD
Vacation Ownership	3/31/2013			6/30/2013			9/30/2013			12/31/2013			12/31/2013

Revenue	$	12,863		$	12,099		$	12,613		$	21,251		$	58,826
Cost of sales	7,084			7,083			7,110			12,671			33,948
Gross profit	5,779			5,016			5,503			8,580			24,878
Selling and marketing expense	125			167			158			172			622
General and administrative expense	4,309			4,488			4,230			5,644			18,671
Amortization expense of intangibles	746			629			658			974			3,007
Depreciation expense	87			85			82			143			397
Operating income (expense)	512			(353		)	375			1,647			2,181
Amortization expense of intangibles	746			629			658			974			3,007
Depreciation expense	87			85			82			143			397
Net income attributable to noncontrolling interest	—			—			—			(565		)	(565		)
Other non-operating income (expense), net	(171		)	(2		)	5			—			(168		)
EBITDA	1,174			359			1,120			2,199			4,852
Non-cash compensation expense	144			168			169			206			687
Prior period item	—			—			—			—			—
Acquisition related and restructuring costs	540			645			1,051			1,223			3,459
Less: Other non-operating income (expense), net	171			2			(5		)	—			168
Adjusted EBITDA	$	2,029		$	1,174		$	2,335		$	3,628		$	9,166

Consolidated Interval Leisure Group Financial Information

	QTD			QTD			QTD			YTD
Interval Leisure Group	3/31/2014			6/30/2014			9/30/2014			9/30/2014

Revenue	$	157,041		$	143,528		$	146,683		$	447,252
Cost of sales	63,851			59,761			58,994			182,606
Gross profit	93,190			83,767			87,689			264,646
Selling and marketing expense	14,568			13,809			14,800			43,177
General and administrative expense	31,438			31,251			31,339			94,028
Amortization expense of intangibles	2,966			2,895			2,879			8,740
Depreciation expense	3,793			3,876			3,765			11,434
Operating income	40,425			31,936			34,906			107,267
Amortization expense of intangibles	2,966			2,895			2,879			8,740
Depreciation expense	3,793			3,876			3,765			11,434
Net income attributable to noncontrolling interest	(979		)	(1,034		)	(809		)	(2,822		)
Other non-operating expense, net	(136		)	(280		)	511			95
EBITDA	46,069			37,393			41,252			124,714
Non-cash compensation expense	2,847			2,632			2,818			8,297
Acquisition related and restructuring costs	1,238			1,169			842			3,249
Less: Other non-operating expense, net	136			280			(511		)	(95		)
Adjusted EBITDA	$	50,290		$	41,474		$	44,401		$	136,165

	QTD			QTD			QTD			QTD			YTD
Interval Leisure Group	3/31/2013			6/30/2013			9/30/2013			12/31/2013			12/31/2013

Revenue	$	134,881		$	124,983		$	119,156		$	122,195		$	501,215
Cost of sales	46,376			43,421			41,991			47,722			179,510
Gross profit	88,505			81,562			77,165			74,473			321,705
Selling and marketing expense	13,734			14,273			12,952			12,763			53,722
General and administrative expense	26,305			28,226			27,386			30,657			112,574
Amortization expense of intangibles	2,012			1,895			1,949			2,277			8,133
Depreciation expense	3,664			3,696			3,499			3,672			14,531
Operating income	42,790			33,472			31,379			25,104			132,745
Amortization expense of intangibles	2,012			1,895			1,949			2,277			8,133
Depreciation expense	3,664			3,696			3,499			3,672			14,531
Net income attributable to noncontrolling interest	(6		)	1			(4		)	(556		)	(565		)
Other non-operating income (expense), net	(519		)	1,478			(65		)	(635		)	259
EBITDA	47,941			40,542			36,758			29,862			155,103
Non-cash compensation expense	2,558			2,586			2,609			2,675			10,428
Prior period item	—			(3,496		)	—			—			(3,496		)
Acquisition related and restructuring costs	752			600			1,440			1,675			4,467
Less: Other non-operating income (expense), net	519			(1,478		)	65			635			(259		)
Adjusted EBITDA	$	51,770		$	38,754		$	40,872		$	34,847		$	166,243

CONFERENCE CALL

ILG will host a conference call on February 26th at 4:30 p.m. Eastern Time to discuss its results for the fourth quarter and full year 2014, with access via the Internet and telephone.

Investors and analysts may participate in the live conference call by dialing (866) 383-8009 (toll-free domestic) or (617) 597-5342 (international); Conference ID: 26944701. Please register at least 10 minutes before the conference call begins. A replay of the call will be available for 14 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); Conference ID: 92132656. 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 www.iilg.com.

ABOUT INTERVAL LEISURE GROUP

Interval Leisure Group (ILG) is a leading global provider of non-traditional lodging, encompassing a portfolio of leisure businesses from exchange and vacation rental to vacation ownership. In its exchange and rental segment, Interval International and Trading Places International (TPI) offer vacation exchange and travel-related products to more than 2 million member families worldwide, while Hyatt Residence Club provides exchanges among its branded resorts in addition to its participation in the Interval Network. Aston Hotels & Resorts and Aqua Hospitality provide hotel and condominium rentals and resort management. In its vacation ownership segment, Vacation Resorts International, VRI Europe, Hyatt Vacation Ownership (HVO) and TPI provide management services to timeshare resorts and clubs, as well as homeowners’ associations. HVO also sells, markets, and finances vacation ownership interests. ILG through its subsidiaries independently owns and manages the Hyatt Residence Club program and uses the Hyatt Vacation Ownership name and other Hyatt marks under license from affiliates of Hyatt Hotels Corporation. Headquartered in Miami, Florida, ILG has offices in 16 countries and more than 6,000 employees. For more information, visit 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; the occurrence of a change of control event under the master license agreement with Hyatt; our failure to comply with designated Hyatt® brand standards with respect to the operation of the Hyatt Vacation Ownership business; our ability to market vacation ownership interests successfully and efficiently; impairment of assets; the restrictive covenants in our revolving credit facility; adverse events or trends in key vacation destinations; business interruptions in connection with 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.

GLOSSARY OF TERMS

Acquisition related and restructuring costs - Represent transaction fees, costs incurred in connection with performing due diligence, subsequent adjustments to our initial estimate of contingent consideration obligations associated with business acquisitions, and other direct costs related to acquisition activities. Additionally, this item includes certain restructuring charges primarily related to workforce reductions and estimated costs of exiting contractual commitments.

Adjusted EBITDA - EBITDA, excluding, if applicable: (1) non-cash compensation expense, (2) goodwill and asset impairments, (3) acquisition related and restructuring costs, (4) other non-operating income and expense (including loss on extinguishment of debt), (5) the impact of correcting prior period items, and (6) other special items. The Company’s presentation of adjusted EBITDA may not be comparable to similarly-titled measures used by other companies.

EBITDA - Net income attributable to common stockholders excluding, if applicable: (1) non-operating interest income and interest expense, (2) income taxes, (3) depreciation expense, and (4) amortization expense of intangibles.

Interval Leisure Group

Investor Contact:

Jennifer Klein, 305-925-7302

Investor Relations

Jennifer.Klein@iilg.com

Media Contact:

Christine Boesch, 305-925-7267

Corporate Communications

Chris.Boesch@iilg.com

ILG, LLC - FORM 8-K - EX-99.2 - February 24, 2015

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