Sabre Holdings Corporation has reported financial results for fourth quarter and full year 2002.
reported fourth quarter 2002 diluted earnings per share of $0.01 on a GAAP basis. Excluding special items, the company reported fourth quarter diluted earnings per share of $0.15. As projected on Dec. 13, the companyÁ?s fourth quarter earnings were primarily impacted by worse than expected travel demand combined with venture capital write downs of approximately $7 million. Fourth quarter 2002 revenue was $447 million.
For the full year, the company reported 2002 diluted earnings per share of $1.50 on a GAAP basis, and $1.79 excluding special items. Revenue for 2002 was $2.0 billion.
“In 2002, we weathered the unprecedented travel industry downturn by executing on our strategies and aggressively managing costs,” said William J. Hannigan
, chairman and CEO, Sabre Holdings Corporation. “Despite a demand challenged year, we turned in solid performances in operating earnings and cash flow.
“The strategic actions we completed in 2002 —the buy in of Travelocity, purchase of Site59, and acceleration of merchant model and online technology initiatives—will be critical fuel for future growth,” said Hannigan.
SABRE HOLDINGS 4Q 2002 FINANCIAL HIGHLIGHTS
? Revenue for the fourth quarter was $447 million, an increase of 5.7 percent from $423 million in the year-ago quarter.
? Operating income, on a GAAP basis, was $6 million, up 106.1 percent from the same period last year. Excluding special items, operating income was $36 million, compared to $7 million in the year-ago quarter.
? Net earnings on a GAAP basis were $1 million, or $0.01 per share on a diluted basis, compared to a net loss of $70 million, or ($0.52) per share on a diluted basis, in the year-ago quarter.
? Net earnings, excluding special items described below, were $21 million in the fourth quarter, compared to $4 million in the year-ago quarter.
? Special items in the fourth quarter included expense of $12 million, net of tax and minority interests, associated with the amortization of certain intangibles and stock compensation and transaction fees arising from merger and acquisition activity, and a one-time charge of $8 million, net of tax, associated with workforce reductions.
SABRE HOLDINGS FULL YEAR 2002 FINANCIAL HIGHLIGHTS
? Revenue from continuing operations for 2002 was $2.0 billion, a decrease of 3.5 percent from $2.1 billion in 2001.
? On a GAAP basis, operating income from continuing operations for 2002 was $318 million, versus an operating loss of $9 million in 2001. Excluding special items, operating income from continuing operations was $414 million, up 31.9 percent from $314 million in 2001.
? Full year net earnings on a GAAP basis were $214 million, or $1.50 per diluted share, compared to $31 million, or $0.24 per diluted share in 2001.
? Full year net earnings, excluding special items, were $255 million, an increase of 10 percent, compared to $232 million in 2001.
? Special items for the year included expense of $52 million, net of tax and minority interests, associated with the amortization of certain intangibles and stock compensation and transaction fees arising from merger and acquisition activity; one-time restructuring charges of $6 million, net of tax, associated with workforce reductions and the reversal of a charge related to facilities; and one-time gains of $17 million, net of tax, from the sale of the companyÁ?s former corporate office facility and the sale of France Telecom shares.
The company made several moves to position the business for longer-term growth:
- Completed a cash tender offer for the outstanding publicly held shares of Travelocity.com common stock that it did not own. On April 11, 2002, Travelocity became a wholly owned company of Sabre Holdings.
- Secured a multi-year strategic alliance with Yahoo! and extended its agreement for Travelocity to serve as the online booking engine for the Yahoo! travel Web site.
- Reached a technology milestone with the initial migration of its massive air pricing application to an open system platform. This is part of SabreÁ?s Air Travel Shopping Engine (ATSE), a multi-year program to migrate air pricing, schedules and availability.
SABRE HOLDINGS OUTLOOK
For first quarter, 2003, the company projects revenue to be in the range of $530 million to $550 million, negative two to positive two percent growth, year-over-year. Diluted earnings per share, on a GAAP basis, are expected to be in the range of $0.41 to $0.46. Excluding the impact of special items, the company projects diluted earnings per share in the range of $0.47 to $0.52. Special items, which include stock compensation and amortization of intangible assets, net of tax and minority interests, are projected to be $9 million.
The company also reiterated its financial projections for the full year 2003. On a GAAP basis, the company projects earnings per share to be in the range of $1.54 to $1.64, representing three to nine percent growth, year-over-year. The company projects 2003 earnings per share excluding special items to be in the range of $1.78 to $1.88, zero to five percent growth, year-over-year. For full year 2003, special non-cash and one-time charges, net of tax and minority interests, are expected to be $34 million, which includes amortization of intangible assets and stock compensation expenses associated with strategic acquisitions.
Additionally, the company projects 2003 revenue will be in the range of $2.1 to $2.2 billion, four to nine percent growth, year-over-year. On a GAAP basis, operating earnings are expected to grow in the mid teens, year-over-year. Operating earnings for 2003, excluding special items, are expected to grow in the range of zero to five percent, year-over-year. EBITDA for 2003 is expected to be greater than $475 million. The company defines EBITDA as income before provision for income taxes, less net interest, plus depreciation and amortization and less other income/expense. For full year 2003, the company expects pre-tax income of $345 million to $368 million, net interest income of $1 million, and depreciation and amortization of approximately $135 million.
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