ResortQuest International, Inc. (NYSE: RZT- news), the first brand name and online booking service (ResortQuest.com) in vacation rentals, resort property management and real estate sales, today announced pro forma results for the first quarter ended March 31, 1999.
Pro forma net income for the first quarter rose 17 percent to $3.3 million from pro forma net income of $2.8 million in 1998, on an 18 percent increase in pro forma revenues to $31.6 million. Pro forma net income per diluted share increased to 19 cents compared to 17 cents per diluted share in the 1998 first quarter. Results were in line with consensus analysts` expectations.
``The first quarter results demonstrated our operating strength and the benefits of our strategy of diversifying our portfolio by location,`` said David Sullivan, chairman and chief executive officer. ``During the quarter, for example, we achieved strong results at our Whistler, British Columbia, and Park City, Utah, ski locations, which more than offset the effects of the snow drought in Colorado. We substantially outperformed the market in Hawaii, which has been buffeted by the Asian financial crisis, and are well positioned for the expected growth in U.S. travel to the Islands in 1999. We also reported strong results in our other winter vacation markets, including the islands of Captiva and Sanibel, Florida, and saw positive results from our first quarter acquisitions in additional winter markets.
``We continued to diversify our portfolio during the quarter, acquiring seven vacation property management companies for a total investment of $24.2 million,`` he said. ``The acquisitions during the quarter bring to 12 the number of acquisitions we have completed since our May 1998 IPO and increase our total portfolio from 9,000 to nearly 15,000 vacation rental units,`` Sullivan said. ``We entered three key markets: Southern California, with an acquisition in Palm Desert/Palm Springs; Hilton Head Island, S.C., where we purchased the area`s leading property management company; and Scottsdale, Arizona, a highly popular desert resort destination. We also purchased our first property management company in Big Sky, Montana, and expanded our presence in the Western U.S. with an acquisition in Sunriver, Oregon, further increasing our geographic diversity and range of vacation experiences.
``The last two acquisitions expanded existing markets: we acquired our fifth Colorado property manager, located in Crested Butte, increasing our depth in this important U.S. ski area, and we broadened our Canadian inventory with a second, post-IPO acquisition in Whistler, British Columbia, which is ranked as the top ski resort in North America. We continue to aggressively pursue acquisitions.``
``In Hawaii, where lower volume from Asian markets is still a factor, we continued our strategy of effectively targeting our business and deploying a combination of rate and vacation package programs to attract more demand,`` said David Levine, president and chief operating officer. ``Although total lodging revenue from our Hawaii properties fell 3.4 percent, total occupied room nights increased 2.4 percent. Our focused marketing to the U.S. mainland helped us improve occupancy, and we also took steps to lower operating costs.`` The company`s Beach and Mountain regions showed lodging revenue improvements of 7.4 percent and 10.4 percent, respectively.
Levine noted that during the quarter the company continued to roll out its product and service standards to all locations and completed the rating of its newest inventory using ResortQuest`s proprietary five-tier quality rating system. ``By offering consistent accommodations at all locations, rated according to quality, condition and amenities, our guests know exactly what to expect every time they stay in a ResortQuest accommodation.
``The introduction in January of our interactive web site, ResortQuest.com, has continued to generate very positive results for us,`` Levine said. ``At ResortQuest.com, consumers can search through our inventory of nearly 15,000 vacation homes and condominiums, view photographs and floor plans, check availability and then make reservations on line. In the month of March, we generated more than eight million hits to our website.``
``We continue to maintain a conservative balance sheet and currently are negotiating a $50 million private placement of senior secured notes that will further diversify our funding sources,`` said Jeff Jarvis, senior vice president and chief financial officer. ``With the expected closing of this transaction in late May, we will have yet another source of funds to continue executing our acquisition strategy.``
Since the company commenced operations in May 1998 and its founding acquisitions required special accounting treatment, pro forma results most accurately reflect the financial status of the company. The consolidated statements of pro forma income include the results of operations of the founding companies, Abbott Resorts, and the three acquisitions accounted for as a pooling of interests (Plantation Resort, Mountain High Management, High Country Resorts) and corporate expense in both current and prior year periods. The remaining acquisitions are included in the results of operations from their respective effective dates of acquisition forward.
ResortQuest historical consolidated financial information for the first quarter ended March 31, 1999 and 1998 includes the results of Aston Hotels & Resorts prior to the founding acquisitions and the company`s initial public offering, and the combined balances and transactions of ResortQuest and the founding companies only since May 26, 1998. Comparability of actual results for the quarter and prior year may be misleading and are not necessarily indicative of the results of the combined operations. As a consequence, historical results are not included in this press release.
Memphis, Tenn.-based ResortQuest provides the first one-stop resource for vacation home and condominium rentals in premier resort destinations in North America. ResortQuest also is the first branded vacation rental, property management and real estate sales company to offer online booking through ResortQuest.com. ResortQuest`s current locations include Gulf Shores, Ala.; Scottsdale/Phoenix, Ariz.; Palm Desert, Calif.; Aspen, Breckenridge, Dillon and Telluride, Colo.; Bethany Beach, Del.; Captiva Island, Destin, Ft. Walton Beach and Sanibel Island, Fla.; St. Simons Island, Ga.; Hawaii, Maui, Oahu, and Kauai, Hawaii; Nantucket, Mass.; Big Sky, Mont.; the Outer Banks of North Carolina; Sunriver, Ore.; Hilton Head Island, S.C.; Park City, Utah; and Whistler, British Columbia.
The matters in this press release include ``forward looking statements`` within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are qualified by cautionary statements contained herein and in ResortQuest International`s filings with the Securities and Exchange Commission.