– First Quarter Net Income of $26.3 Million –
– Total Adjusted EBITDA of $73.4 Million –
– First Quarter Gross Room Nights Booked For All Future Years Increases 12.6 Percent –
NASHVILLE, Tenn.–May 3, 2016– Ryman Hospitality Properties, Inc. (NYSE:RHP), a lodging real estate investment trust ("REIT") specializing in group-oriented, destination hotel assets in urban and resort markets, today reported financial results for the first quarter ended March 31, 2016.
Colin Reed, chairman and chief executive officer of Ryman Hospitality Properties, said, “As we noted during our Investor and Analyst Day on March 10, our first quarter 2016 results were in line with our 2015 results despite a confluence of unfavorable events that included a shift of the Easter holiday into the first quarter and an impact from winter storm Jonas. We are pleased with how our hotels responded to these events, both anticipated and unforeseen, to deliver a quarter that was in line with our profitability expectations going into the year.
“Our bookings activity for first quarter 2016 was strong, particularly considering the record fourth quarter and full year bookings we had in 2015. The group segment continues to perform well, and we remain enthusiastic about the demand we are seeing for future years.”
First Quarter 2016 Results (As Compared to First Quarter 2015) Included the Following:
($ in thousands, except per share amounts, RevPAR and Total RevPAR)
Three Months Ended March 31, 2016 2015 % ∆ Total Revenue $261,497 $253,148 3.3% Same-Store Hospitality Revenue (1) $242,379 $236,454 2.5% Same-Store RevPAR (1) $129.50 $129.96 -0.4% Same-Store Total RevPAR (1) $328.91 $324.43 1.4% Adjusted EBITDA $73,416 $73,826 -0.6% Adjusted EBITDA Margin 28.1% 29.2% -1.1pt Same-Store Hospitality Adjusted EBITDA (1) $75,954 $75,844 0.1% Same-Store Hospitality Adjusted EBITDA Margin (1) 31.3% 32.1% -0.8pt Adjusted FFO (2) $56,550 $58,674 -3.6% Adjusted FFO per diluted share $1.10 $1.14 -3.5% Operating income $38,794 $35,890 8.1% Net income (3) $26,346 $4,532 481.3% Net income per diluted share (3) $0.51 $0.09 466.7%
(1)
Same-Store excludes the AC Hotel at National Harbor, which opened in April 2015.
(2)
Adjusted FFO for both periods is presented using the 2016 definition of Adjusted FFO contained in this release.
(3)
Net income for first quarter 2015 includes a loss of $20.2 million on warrant settlements associated with our previous convertible notes.
For the Company’s definitions of RevPAR, Total RevPAR, Adjusted EBITDA and Adjusted FFO, as well as a reconciliation of the non-GAAP financial measure Adjusted EBITDA to Net Income and a reconciliation of the non-GAAP financial measure Adjusted FFO to Net Income, see “Calculation of RevPAR and Total RevPAR,” “Non-GAAP Financial Measures,” “Revised Adjusted FFO Definition” and “Supplemental Financial Results” below. Adjusted FFO for 2015 presented herein also reflects the revised Adjusted FFO definition used for 2016.
Operating Results
Hospitality Segment
For the three months ended March 31, 2016 and 2015, the Company reported the following:
($ in thousands, except for ADR, RevPAR and Total RevPAR)
Three Months Ended March 31, 2016 2015 % ∆
Hospitality Results
Hospitality Revenue $244,191 $236,454 3.3% Hospitality Adjusted EBITDA $76,341 $75,844 0.7% Hospitality Adjusted EBITDA Margin 31.3% 32.1% -0.8pt Hospitality Performance Metrics Occupancy 70.2% 71.0% -0.8pt Average Daily Rate (ADR) $183.21 $183.13 0.0% RevPAR $128.54 $129.96 -1.1% Total RevPAR $323.69 $324.43 -0.2% Gross Definite Rooms Nights Booked 386,566 343,265 12.6% Net Definite Rooms Nights Booked 319,015 263,055 21.3% Group Attrition (as % of contracted block) 11.0% 11.3% -0.3pt Cancellations ITYFTY (1) 15,773 12,019 31.2%
Same-Store Hospitality Results (2)
Same-Store Hospitality Revenue $242,379 $236,454 2.5% Same-Store Hospitality Adjusted EBITDA $75,954 $75,844 0.1% Same-Store Hospitality Adjusted EBITDA Margin 31.3% 32.1% -0.8pt Same-Store Hospitality Performance Metrics Occupancy 70.7% 71.0% -0.3pt Average Daily Rate (ADR) $183.26 $183.13 0.1% RevPAR $129.50 $129.96 -0.4% Total RevPAR $328.91 $324.43 1.4%
(1)
"ITYFTY" represents In The Year For The Year.
(2)
Same-Store excludes the AC Hotel at National Harbor, which opened in April 2015.
Property-level results and operating metrics for first quarter 2016 are presented in greater detail below and under “Supplemental Financial Results.” Highlights for first quarter 2016 for the Hospitality segment and at each property include:
- Hospitality Segment (Same Store): Total revenue increased 2.5 percent to $242.4 million in first quarter 2016 compared to first quarter 2015. Group performance was tempered in the first quarter of 2016 compared to 2015 due to a shift in the timing of the Easter holiday into the first quarter coupled with the impact of winter storm Jonas at Gaylord National and Gaylord Opryland. Adjusted EBITDA was flat at $76.0 million compared to first quarter 2015, and Adjusted EBITDA Margin decreased by 80 basis points. Adjusted EBITDA margin in first quarter 2015 was positively impacted by the collection of a portion of insurance proceeds related to the norovirus event at Gaylord Opryland, which made for a challenging comparison. In addition, Adjusted EBITDA for first quarter 2016 includes the accrual of approximately $1 million in additional incentive management fees payable to our operator based on full year 2016 performance expectations.
- Gaylord Opryland: Total revenue increased 12.0 percent to $75.6 million in first quarter 2016 compared to first quarter 2015, driven by a 6.4 point occupancy increase and strong banquet performance. In first quarter 2015, a norovirus outbreak unfavorably impacted revenue, occupancy and banquet performance. Adjusted EBITDA increased 10.7 percent to $24.1 million compared to first quarter 2015. Adjusted EBITDA was unfavorably impacted by the norovirus outbreak in first quarter 2015, and $1.2 million in insurance proceeds in the first quarter of 2015 related to the norovirus disruptions partially offset that impact.
- Gaylord Palms: Total revenue increased 4.5 percent to $55.8 million in first quarter 2016 compared to first quarter 2015, due primarily to an increase in catering revenue and higher attrition and cancellation fee collections. Adjusted EBITDA increased 4.1 percent to $20.9 million compared to first quarter 2015.
- Gaylord Texan: Total revenue decreased 3.0 percent to $53.7 million in first quarter 2016 compared to first quarter 2015 due to an occupancy decrease of 3.1 points and a 5.3 percent reduction in ADR due to a mix shift to fewer premium corporate groups. Adjusted EBITDA decreased 7.3 percent to $19.4 million compared to first quarter 2015.
- Gaylord National: Total revenue decreased 5.9 percent to $54.2 million in first quarter 2016 compared to first quarter 2015, driven by a 7.9 point decline in occupancy and reduced banquets spending, primarily attributable to winter storm Jonas and a shift of the Easter holiday into the first quarter impacting group bookings. Adjusted EBITDA decreased 13.4 percent to $10.9 million compared to first quarter 2015.
Reed continued, “Notwithstanding the challenges of the first quarter, our Hospitality segment profitability was right where we expected it to be. Our outlook for the remainder of the year has not changed, and we believe our hotels are on pace for another record year. Given this level of expected annual performance, we anticipated that profitability would be impacted this quarter and through the remainder of the year due to the accrual of our incentive management fee, which is based on our full year outlook.”
Entertainment Segment
For the three months ended March 31, 2016 and 2015, the Company reported the following:
Three Months Ended March 31, ($ in thousands) 2016 2015 % ∆ Revenue $17,306 $16,694 3.7% Operating Income $963 $2,120 -54.6% Adjusted EBITDA $2,772 $3,743 -25.9% Adjusted EBITDA Margin 16.0% 22.4% -6.4pt
Reed continued, “Our planned investments in the Entertainment segment impacted our first quarter 2016 results. Specifically, we are investing in our people as well as dedicating more resources to areas such as social media, e-commerce, and content development so that we are able to execute on the strategies and initiatives that lay before us.
In addition, we announced in February an $8.6 million renovation project for the Wildhorse Saloon as part of our Nashville attractions strategy. The Wildhorse Saloon’s opening more than 20 years ago was a catalyst for much of the redevelopment in the downtown entertainment district, and we are excited to unveil the improvements we are making to this unique piece of Nashville history. While the Wildhorse Saloon has remained open during construction, the renovation did impact the venue’s ability to service large groups, which had a year-over-year impact on the Entertainment segment’s results. We are on track to complete this project in time for the summer tourist season.”
Corporate and Other Segment Results
For the three months ended March 31, 2016 and 2015, the Company reported the following:
Corporate Segment Results Three Months Ended March 31, ($ in thousands) 2016 2015 % ∆ Operating Loss ($7,628) ($7,809) 2.3% Adjusted EBITDA ($5,697) ($5,761) 1.1%
Development Update
On March 9, 2016, Ryman Hospitality Properties announced that it had acquired a 35 percent equity ownership stake in the Gaylord Rockies Resort and Convention Center project in Aurora, Colorado, with an expected aggregate investment of approximately $86 million, which will be funded with cash on hand and borrowings under the Company’s credit facility. The Company will have asset management responsibilities, and Marriott International will manage the hotel and convention center. Gaylord Rockies is currently under construction and is expected to open in late 2018.
Reed continued, “We are thrilled to be a part of this milestone expansion of the Gaylord Hotels brand. This hotel represents the first western destination for the Gaylord Hotels model, and we believe from our extensive research that it is something our key group customers and meeting planners have been anxious to see come to fruition. We believe this hotel will serve existing customers who are presently rotating outside of the brand when they plan their western meetings and also induce new demand into our existing properties from western-based groups. Combined with our previously-announced expansion at Gaylord Texan, we believe our Company is in an ideal position to capitalize on the future demand we are seeing in the group segment.”
Dividend Update
The Company paid its first quarter 2016 cash dividend of $0.75 per share of common stock on April 15, 2016 to stockholders of record on March 31, 2016. It is the Company’s current plan to distribute total 2016 annual dividends of approximately $3.00 per share in cash in equal quarterly payments with the remaining payments occurring in July and October of 2016 and January of 2017. Any future dividend is subject to the Board of Director’s determinations as to the amount of quarterly distributions and the timing thereof.
Balance Sheet/Liquidity Update
As of March 31, 2016, the Company had total debt outstanding of $1,480.9 million, net of unamortized deferred financing costs, and unrestricted cash of $57.2 million. As of March 31, 2016, $361.4 million of borrowings were drawn under the revolving credit line of the Company’s credit facility, and the lending banks had issued $2.1 million in letters of credit, which left $336.5 million of availability for borrowing under the credit facility.
Share Repurchase Update
On August 20, 2015, the Board of Directors authorized a share repurchase program for up to $100 million of the Company’s common stock using cash on hand and borrowings under its revolving credit line. The repurchases are intended to be implemented through open market transactions on U.S. exchanges or in privately negotiated transactions, in accordance with applicable securities laws, and any market purchases will be made during open trading window periods or pursuant to any applicable Rule 10b5-1 trading plans. The repurchase authorization extends until December 31, 2016. The timing, prices, and sizes of repurchases will depend upon prevailing market prices, general economic and market conditions and other considerations. The repurchase program does not obligate the Company to acquire any particular amount of stock. As of March 31, 2016, the Company had repurchased and cancelled approximately 538,700 shares of its common stock during the first quarter of 2016 for an aggregate purchase price of approximately $24.8 million, which the Company funded using cash on hand and borrowings under the revolving credit line of its credit facility.
Guidance
The Company is reaffirming its 2016 guidance provided on February 26, 2016 on a consolidated as well as on a segment basis. The Company does not expect to update the guidance before next quarter’s earnings release. However, the Company may update its full business outlook or any portion thereof at any time for any reason.
Reed continued, “Our first quarter performance expectations were factored in the guidance we issued in February. Given that the quarter was in line with those expectations and that the pace of our in the year for the year group bookings for the rest of 2016 is also aligning with our expectations, we believe the guidance range we issued at the outset of the year remains an accurate reflection of our anticipated full year performance.”
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