Pegasus Solutions has announced financial results for the third quarter and nine months ended September 30, 2001.
Cash earnings per share (EPS), excluding one-time restructuring costs and consulting fees associated with the restructuring, were $0.17 per diluted share for the third quarter and $0.40 per diluted share for the nine months ended September 30, 2001. Revenue was $45.2 million for the third quarter and $141.1 million for the nine months ended September 30, 2001.
Commenting on the business trends, John F. Davis, III, chairman and chief executive officer of Pegasus Solutions stated, “Consistent with other travel-related companies, for several days after the tragedy on September 11, we experienced a significant reduction in net reservation volumes. However, I am pleased with our quarterly results and to see that our current revenues are tracking at approximately 90 percent for our technology business and approximately 81 percent for our Utell business compared to the days immediately preceding the events.”
Total revenue for the third quarter of 2001 was $45.2 million compared to $45.7 million for the third quarter of 2000, excluding revenue from discontinued and divested businesses. Pegasus sold its Golden Tulip, Summit and Sterling Hotels brand businesses earlier this year. Cash earnings, which exclude one-time restructuring costs and consulting fees associated with the restructuring, were $0.17 per diluted share for the third quarter of 2001 compared to $0.19 per diluted share for the third quarter of 2000. The year-over-year decrease in both revenue and cash earnings was due to the continued softness in the economy and its adverse impact on the travel industry, which was compounded by the events of September 11. Excluding one-time restructuring costs, consulting fees associated with the restructuring and other income and expense, EBITDA for the third quarter of 2001 was $9.8 million, representing a 22 percent margin.
The Company`s technology business, comprised of Central Reservations Services (CRS), Financial Services, Electronic Distribution and Property Systems and Services, generated $27.4 million in revenue during the third quarter of 2001 compared to $25.8 million during the same quarter of 2000.
CRS revenue for the third quarter increased 13 percent on a year-over-year basis. Third quarter revenue for Financial Services, which includes its Commission Processing service, increased 9 percent compared to the same quarter in 2000. Electronic Distribution revenue for the third quarter was down 13 percent on a year-over-year basis, which was in line with expectations considering the mature nature of this business and the impact from the events of September 11.
The Company`s Utell subsidiary generated $17.8 million in revenue for the third quarter of 2001 compared to $20.0 million for the same quarter in 2000. Utell saw abnormally high cancellation rates in the days following September 11. Although cancellations have returned to normal levels, travel from the United States to overseas destinations has not recovered as quickly as intra-European travel. As such, Utell`s net reservation volumes have been slower to recover than the Company`s technology business net reservation volumes. Utell`s revenue was further negatively impacted by a 3 percent decline in its hotel customers` average daily rates during the period.
Commenting on the third quarter results, Davis said, “Despite the negative impact of the events of September 11, our technology business performed well. While we expect lower reservation volumes to continue for some time, the steady recovery we have seen so far and our strong balance sheet allows us to continue with our overall business strategy, including our reorganization. The organizational changes we announced the first week of September should prove particularly beneficial in these times and well into the future.”