Company Completes Amendment to Credit Facility Waiving Covenant Testing until Second Quarter of 2021
PARSIPPANY, N.J., May 5, 2020 — Wyndham Hotels & Resorts (NYSE: WH) today announced results for the three months ended March 31, 2020. Highlights include:
- Diluted earnings per share increased 5% to $0.23, and adjusted diluted EPS decreased 4% to $0.50.
- Net income was $22 million for the first quarter, a 5% increase over the prior-year quarter; adjusted net income was $47 million, an 8% decrease over the prior-year quarter.
- Adjusted EBITDA decreased 4% compared with the prior-year quarter, to $107 million.
- System-wide rooms grew 2% year-over-year.
- The Company’s development pipeline grew 4% year-over-year to 189,000 rooms.
- Global RevPAR declined 23% year-over-year in constant currency.
“During the most challenging crisis the hotel industry has ever endured, our highest priority has remained the well-being and safety of our guests, owners and team members. We have taken the difficult but prudent measures to reduce our costs and bolster our liquidity while providing support and relief for our franchisees to help them weather this downturn,” said Geoffrey A. Ballotti, chief executive officer. “Nearly 5,900 of our 6,300 hotels in the U.S. remain open, and with nearly 90% of those properties located outside of major cities in drive-to destinations that cater to a leisure customer base, we believe that our asset-light business is well positioned for a quick recovery when travel demand returns.”
Revenues decreased 12% to $410 million, compared with $468 million in the first quarter of 2019. The decline includes lower pass-through cost-reimbursement revenues, which have little to no impact on adjusted EBITDA, in the Company’s hotel management business. Excluding cost-reimbursement revenues, revenues declined $29 million or 9%, reflecting a 23% decline in constant-currency RevPAR, as well as lower license fees which were adversely impacted by declining travel demand.
Net income increased 5% to $22 million, or $0.23 per diluted share, compared to $21 million, or $0.22 per diluted share, in the first quarter of 2019 due to lower separation-related expenses associated with the Company’s spin-off and a decline in overall expenses due to cost reduction initiatives, partially offset by the decline in revenue (excluding cost-reimbursement revenues). Full reconciliations of GAAP results to the Company’s non-GAAP adjusted measures for all reported periods appear in the tables to this press release.
