– Second Quarter Net Income of $51.3 Million –
– Total Adjusted EBITDA of $99.1 Million –
– Same-Store RevPAR Increased 5.9 Percent, Same-Store Total RevPAR Increased 6.4 Percent –
– Second Quarter Gross Room Nights Booked for All Future Years Increased 13.5 Percent –
– Updates Full-Year Guidance –
NASHVILLE, Tenn.–Aug. 2, 2016– Ryman Hospitality Properties, Inc. (NYSE:RHP), a lodging real estate investment trust ("REIT") specializing in group-oriented, destination hotel assets in urban and resort markets, today reported financial results for the second quarter ended June 30, 2016.
Colin Reed, chairman and chief executive officer of Ryman Hospitality Properties, said, “We are very pleased with our solid second quarter 2016 results from a revenue and Adjusted EBITDA perspective. We anticipated that the second quarter would be strong for our Hospitality segment, which generated same-store RevPAR growth of 5.9 percent and same-store Total RevPAR growth of 6.4 percent when compared to the second quarter of 2015.
Along with our peers, we did experience some in the year for the year softness during the second quarter of 2016; however, the contractual nature of our business affords us a measure of profitability protection during times of macroeconomic uncertainty that differentiates our model from others in our sector.
On the bookings front, we bested our impressive 2015 second quarter gross definite room night bookings for all future periods by 13.5 percent in the second quarter of 2016, which is indicative of the continued strength we see in our core group business in the years ahead.”
Second Quarter and Year-to-Date 2016 Results (As Compared to Second Quarter and Year-to-Date 2015) Included the Following:
($ in thousands, except RevPAR and Total RevPAR)
Three Months Ended Six Months Ended June 30, June 30, 2016 2015 % ∆ 2016 2015 % ∆ Total Revenue $296,215 $274,036 8.1% $557,712 $527,184 5.8% Same-Store Hospitality Revenue (1) $259,307 $243,522 6.5% $501,686 $479,976 4.5% Same-Store RevPAR (1) $147.32 $139.07 5.9% $138.42 $134.54 2.9% Same-Store Total RevPAR (1) $351.45 $330.46 6.4% $340.18 $327.46 3.9% Operating income $66,945 $57,015 17.4% $105,739 $92,905 13.8% Net income (2) $51,331 $41,389 24.0% $77,677 $45,921 69.2% Net income per diluted share (2) $1.00 $0.80 25.0% $1.51 $0.89 69.7% Adjusted EBITDA $99,058 $91,751 8.0% $172,474 $165,577 4.2% Adjusted EBITDA Margin 33.4% 33.5% -0.1pt 30.9% 31.4% -0.5pt Same-Store Hospitality Adjusted EBITDA (1) $90,262 $84,035 7.4% $166,216 $159,878 4.0% Same-Store Hospitality Adjusted EBITDA Margin (1) 34.8% 34.5% 0.3pt 33.1% 33.3% -0.2pt Funds From Operations (FFO) $77,756 $69,788 11.4% $132,880 $102,890 29.1% FFO per diluted share $1.52 $1.35 12.6% $2.59 $2.00 29.5% Adjusted FFO (3) $81,586 $75,287 8.4% $138,136 $133,961 3.1% Adjusted FFO per diluted share $1.59 $1.46 8.9% $2.69 $2.60 3.5%
(1)
Same-Store excludes the AC Hotel at National Harbor, which opened in April 2015.
(2)
Net income for the six months ended June 30, 2015 includes a loss of $20.2 million on warrant settlements associated with our previous convertible notes.
(3)
Adjusted FFO for both periods is presented using the 2016 definition of Adjusted FFO contained in this release.
For the Company’s definitions of RevPAR, Total RevPAR, Adjusted EBITDA and Adjusted FFO, as well as a reconciliation of the non-GAAP financial measure Adjusted EBITDA to Net Income and a reconciliation of the non-GAAP financial measure Adjusted FFO to Net Income, see “Calculation of RevPAR and Total RevPAR,” “Non-GAAP Financial Measures,” “Revised Adjusted FFO Definition” and “Supplemental Financial Results” below. Adjusted FFO for 2015 presented herein also reflects the revised Adjusted FFO definition used for 2016.
Operating Results
Hospitality Segment
($ in thousands, except per share amounts, RevPAR and Total RevPAR)
For the three months and six months ended June 30, 2016 and 2015, the Company reported the following:
Three Months Ended Six Months Ended June 30, June 30, 2016 2015 % ∆ 2016 2015 % ∆
Hospitality Results
Hospitality Revenue $262,329 $245,835 6.7% $506,520 $482,289 5.0% Hospitality Operating Income $63,018 $53,827 17.1% $108,477 $95,406 13.7% Hospitality Adjusted EBITDA $91,502 $85,066 7.6% $167,843 $ 160,910 4.3% Hospitality Adjusted EBITDA Margin 34.9% 34.6% 0.3pt 33.1% 33.4% -0.3pt Hospitality Performance Metrics Occupancy 78.0% 75.2% 2.8pt 74.1% 73.1% 1.0pt Average Daily Rate (ADR) $188.86 $184.32 2.5% $186.19 $183.75 1.3% RevPAR $147.40 $138.61 6.3% $137.98 $134.36 2.7% Total RevPAR $347.32 $325.96 6.6% $335.51 $325.21 3.2% Gross Definite Rooms Nights Booked 604,093 532,270 13.5% 990,659 875,535 13.1% Net Definite Rooms Nights Booked 429,507 402,433 6.7% 748,522 665,488 12.5% Group Attrition (as % of contracted block) 12.8% 13.4% -0.6pt 11.9% 12.4% -0.5pt Cancellations ITYFTY (1) 12,739 6,057 110.3% 28,512 18,076 57.7%
Same-Store Hospitality Results (2)
Same-Store Hospitality Revenue $259,307 $243,522 6.5% $501,686 $479,976 4.5% Same-Store Hospitality Operating Income $62,094 $53,264 16.6% $107,482 $95,589 12.4% Same-Store Hospitality Adjusted EBITDA $90,262 $84,035 7.4% $166,216 $ 159,878 4.0% Same-Store Hospitality Adjusted EBITDA Margin 34.8% 34.5% 0.3pt 33.1% 33.3% -0.2pt Same-Store Hospitality Performance Metrics Occupancy 78.0% 75.6% 2.4pt 74.3% 73.3% 1.0pt Average Daily Rate (ADR) $188.86 $183.83 2.7% $186.20 $183.49 1.5% RevPAR $147.32 $139.07 5.9% $138.42 $134.54 2.9% Total RevPAR $351.45 $330.46 6.4% $340.18 $327.46 3.9%
(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 second quarter 2016 are presented in greater detail below and under “Supplemental Financial Results—Hospitality Segment Adjusted EBITDA Reconciliations,” which includes a reconciliation of the non-GAAP financial measures Hospitality Adjusted EBITDA to Hospitality Operating Income, Same-Store Hospitality Adjusted EBITDA to Same-Store Hospitality Operating Income, and property-level Adjusted EBITDA to property-level Operating Income for each of the hotel properties. Highlights for second quarter 2016 for the Hospitality segment and at each property include:
- Hospitality Segment (Same-Store): Total revenue increased 6.5 percent to $259.3 million in second quarter 2016 compared to second quarter 2015. RevPAR increased 5.9 percent, driven by an increase in occupancy of 2.4 percentage points and a 2.7 percent increase in ADR. Operating income increased 16.6 percent to $62.1 million in second quarter 2016 compared to second quarter 2015. Adjusted EBITDA increased 7.4 percent, as compared to second quarter 2015, to $90.3 million. Adjusted EBITDA margin was up slightly compared to second quarter 2015. Adjusted EBITDA for second quarter 2016 includes the accrual of approximately $0.7 million in additional incentive management fees payable to our operator based on full-year 2016 performance expectations.
- Gaylord Opryland: Total revenue for second quarter 2016 increased 1.5 percent to $79.6 million compared to second quarter 2015, driven by strong ADR growth and solid food and beverage performance despite a decrease in occupancy of 2.3 percentage points compared to second quarter 2015. There were 8,630 room nights out of service during the second quarter of 2016 due to a planned rooms renovation. Operating income decreased 3.6 percent to $21.4 million in second quarter 2016 compared to second quarter 2015. Adjusted EBITDA decreased 3.3 percent, as compared to second quarter 2015, to $28.7 million, and Adjusted EBITDA margin decreased by 180 basis points due to lower attrition and cancellation fees collected, non-capitalized costs associated with a planned rooms renovation, an increase in group commissions paid and an increase in costs associated with the accrual of incentive management fees.
- Gaylord Palms: Total revenue for second quarter 2016 increased 11.6 percent to $45.7 million compared to second quarter 2015 due to a 6.5 percentage point increase in occupancy coupled with an increase in food and beverage revenue. Strong banquet revenue and new and refurbished dining outlets that opened in the second quarter of 2016 were the main drivers for the year-over-year food and beverage increase. Operating income increased 56.5 percent to $8.1 million in second quarter 2016 compared to second quarter 2015. Adjusted EBITDA increased 27.0 percent to $14.1 million compared to second quarter 2015, and Adjusted EBITDA margin increased by 370 basis points.
- Gaylord Texan: Total revenue for second quarter 2016 increased 12.8 percent to $56.4 million, due to a 6.1 percentage point increase in occupancy as well as a 5.9 percent increase in ADR compared to second quarter 2015. Operating income increased 29.4 percent to $15.6 million in second quarter 2016 compared to second quarter 2015. Adjusted EBITDA increased 20.6 percent to $20.6 million compared to second quarter 2015, driven by the growth in rooms revenue coupled with an increase in food and beverage revenue related to strong group performance and summer holiday programming. Adjusted EBITDA margin increased by 240 basis points compared to second quarter 2015.
- Gaylord National: Total revenue for second quarter 2016 increased 4.3 percent to $73.6 million, driven by a 2.8 percentage point increase in occupancy and an increase in food and beverage revenue compared to second quarter 2015. Operating income increased 23.0 percent to $16.0 million in second quarter 2016 compared to second quarter 2015. Adjusted EBITDA increased 2.0 percent to $25.4 million, as compared to second quarter 2015. Adjusted EBITDA margin decreased by 80 basis points due to a decrease in bond interest income as a result of a note receivable discount amortization, higher sales and marketing expenses and an increase in group commissions paid during the second quarter of 2016 as compared to second quarter 2015.
Reed continued, “We are pleased with the top- and bottom-line growth our hotels produced on association and transient-driven occupancy increases this quarter as compared to the second quarter of 2015. We are especially pleased with these results given that we had the equivalent of approximately 1.2 points of occupancy out of service in the second quarter due to the rooms renovation program at Gaylord Opryland.
We saw strong group performance at Gaylord Texan, which led the brand in occupancy this quarter. This strong group performance was augmented by high-rated leisure business due in part to the debut of the resort’s $5 million pool expansion over Memorial Day weekend. We look forward to breaking ground on the larger Gaylord Texan rooms and meeting space expansion in the third quarter.”
Entertainment Segment
For the three months and six months ended June 30, 2016 and 2015, the Company reported the following:
Three Months Ended Six Months Ended ($ in thousands) June 30, June 30,
2016
2015
% ∆
2016
2015
% ∆
Revenue $33,886 $28,201 20.2% $51,192 $44,895 14.0% Operating Income $11,491 $10,158 13.1% $12,454 $12,278 1.4% Adjusted EBITDA $13,247 $11,674 13.5% $16,019 $15,417 3.9% Adjusted EBITDA Margin 39.1% 41.4% -2.3pt 31.3% 34.3% -3.0pt
Reed continued, “Our Entertainment segment produced strong, double-digit year-over-year increases in both revenue and Adjusted EBITDA in the second quarter compared to the prior-year quarter, which further demonstrates the increased demand for our one-of-a-kind assets. Our previously-announced Wildhorse Saloon renovation was completed in May, and early feedback from our group customers and leisure guests has been positive.
We continued to make investments in people and resources during the second quarter to help us pursue growth opportunities for this segment, which is reflected in our Adjusted EBITDA margin. In addition to these investments, we recruited a chief operating officer during the quarter, who officially joined the Company in July to oversee our flagship Entertainment assets as we pursue our strategic growth initiatives.”
Corporate and Other Segment
For the three months and six months ended June 30, 2016 and 2015, the Company reported the following:
Three Months Ended Six Months Ended ($ in thousands) June 30, June 30,
2016
2015
% ∆
2016
2015
% ∆
Operating Loss ($7,564) ($6,970) -8.5% ($15,192) ($14,779) -2.8% Adjusted EBITDA ($5,691) ($4,989) -14.1% ($11,388) ($10,750) -5.9%
Dividend Update
The Company paid its second quarter 2016 cash dividend of $0.75 per share of common stock on July 15, 2016 to stockholders of record on June 30, 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 October 2016 and January 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 June 30, 2016, the Company had total debt outstanding of $1,493.6 million, net of unamortized deferred financing costs, and unrestricted cash of $50.7 million. As of June 30, 2016, $373.9 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 $324.0 million of availability for borrowing under the credit facility.
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