PARSIPPANY, N.J., April 26, 2017 — Wyndham Worldwide Corporation (NYSE: WYN) today announced results for the three months ended March 31, 2017.
FIRST QUARTER 2017 OPERATING RESULTS First quarter revenues were $1.3 billion, up 1% compared with the prior year period. Full reconciliations of GAAP results to non-GAAP measures for all reported periods appear in the tables to this press release.
Net income for the first quarter of 2017 was $141 million compared with $96 million for the first quarter of 2016. Diluted earnings per share (EPS) were $1.33 compared with $0.84 for the prior year period. Adjusted net income for the first quarter of 2017, which excludes charges and gains in 2017 and charges in 2016 as detailed in Table 7 of this press release, was $120 million compared with $127 million for the first quarter of 2016, primarily reflecting a higher provision for loan losses and benefits in the prior-year period related to business interruption claims that were absent in the first quarter of 2017. Adjusted diluted EPS was $1.14 compared with $1.12 per share in the prior year period, reflecting the benefit of the Company's share repurchase program.
First quarter EBITDA was $266 million, compared with $267 million in the prior year period. Adjusted EBITDA, which excludes charges in both 2017 and 2016 as detailed in Table 8 of this press release, was $278 million, compared with $291 million in the prior year period, primarily reflecting a higher provision for loan losses and benefits in the prior-year period related to business interruption claims that were absent in the first quarter of 2017.
"Our first quarter results were right in line with our expectations," said Stephen P. Holmes, chairman and CEO. "We're excited by the progress we're making in connecting our customers and brands through Wyndham Rewards to enhance customer acquisition, experience and retention. We expect this to result in stronger growth and greater long-term value for our shareholders this year and for years to come.
"In addition, we are pleased to welcome Mike Brown as the new CEO and president of our vacation ownership business," continued Mr. Holmes. "Mike is a 25-year hospitality industry veteran and brings an ideal combination of strategic vision, operational expertise, and industry knowledge to the role. I am confident that Mike is the right leader to take Wyndham Vacation Ownership to the next level."
For the three months ended March 31, 2017, net cash provided by operating activities was $238 million, compared with $261 million in the prior year period. The decrease primarily reflects changes in the timing of inventory purchases.
Free cash flow was $203 million for the three months ended March 31, 2017, compared with $218 million for the same period in 2016, primarily reflecting the changes in net cash provided by operating activities. The Company defines free cash flow as net cash provided by operating activities less capital expenditures.
FIRST QUARTER 2017 BUSINESS UNIT RESULTS
Hotel Group Revenues were $298 million in the first quarter of 2017, compared with $295 million in the first quarter of 2016. EBITDA was $85 million in the first quarter compared with $84 million in the prior-year quarter, growing 2% on a currency-neutral basis. Results reflect higher franchise fees and growth in the Wyndham Rewards credit card program, partially offset by lower occupancy at the Company's owned hotel in Puerto Rico due to consumer concerns about the Zika virus.
First quarter domestic same-store RevPAR increased 1.7% compared with the first quarter of 2016. In constant currency, total system-wide same-store RevPAR increased 2.2%.
As of March 31, 2017, the Company's hotel system consisted of approximately 8,100 properties and 699,800 rooms, a 3.0% net room increase compared with the first quarter of 2016. The development pipeline increased to 1,130 hotels and approximately 143,100 rooms, of which 59% were international and 68% were new construction.
Destination Network Revenues were $391 million in the first quarter of 2017, compared with $385 million in the first quarter of 2016, an increase of 2%. In constant currency and excluding acquisitions, revenues increased 1%.
Vacation rental revenues were $184 million compared with $183 million in the prior year quarter. In constant currency and excluding acquisitions, vacation rental revenues increased 1%, reflecting a 2.8% increase in transaction volume partially offset by a 2.0% decline in the average net price per rental. Transaction volume benefited from capacity increases across the Company's U.K.-based cottages and parks brands and Denmark-based Novasol brand, partially offset by the impact from the timing of the Easter holiday. Average net price per rental declined due to the mix impact of growth in the Company's more modestly priced brands and the timing of the Easter holiday.
Exchange revenues were $183 million compared with $182 million in the prior year quarter. In constant currency, exchange revenue per member increased 0.8% and the average number of members declined 0.6%.
EBITDA was $102 million in the first quarter of 2017, including $2 million from acquisitions. This compares with first quarter 2016 EBITDA of $81 million or adjusted EBITDA of $105 million. 2016 adjusted EBITDA excluded a $24 million loss related to a currency devaluation. First quarter year-over-year EBITDA and adjusted EBITDA comparisons reflect the absence of a benefit of $3 million from business disruption claims received in the first quarter of 2016, as well as the unfavorable impact of the timing of the Easter holiday.
Vacation Ownership Revenues were $648 million in the first quarter of 2017, compared with $641 million in the first quarter of 2016.
Gross VOI sales increased 3% in the first quarter of 2017. Volume per guest (VPG) was up 4.9%, reflecting both a higher average close rate and transaction size. Tour flow declined 1.7% due to the closure of sales offices as part of a restructuring in the second half of last year.
EBITDA was $118 million in the first quarter of 2017 compared with $136 million in the prior year quarter. Adjusted EBITDA was $124 million in the first quarter of 2017. First quarter year-over-year EBITDA and adjusted EBITDA results reflect higher gross VOI sales offset by a higher provision for loan losses and the absence of a $6 million benefit from business interruption insurance claims received in the first quarter of 2016.
OTHER ITEMS
- The Company repurchased 1.9 million shares of common stock for $150 million during the first quarter of 2017 at an average price of $80.93. From April 1 through April 25, 2017, the Company repurchased an additional 0.4 million shares for $36 million.
- Net interest expense in the first quarter of 2017 was $31 million, flat compared with the first quarter of 2016.
- Depreciation and amortization in the first quarter of 2017 was $63 million, compared with $62 million in the first quarter of 2016.
To view full financial release and corresponding tables please click the PDF icon or visit: http://investor.wyndhamworldwide.com/phoenix.zhtml?c=200690&p=irol-newsArticle&ID=2265692
