ResortQuest International, Inc. (NYSE: RZT), the first brand name and online booking service (ResortQuest.com) in vacation condominium and home rentals, sales and property management services, today announced pro forma results for the second quarter ended June 30, 1999.
Pro forma net income for the second quarter rose 54 percent to $2.0 million from pro forma net income of $1.3 million in 1998, on a 22 percent increase in pro forma revenue to $31.0 million. Pro forma net income per diluted share was 11 cents, compared to 7 cents per diluted share in the 1998 second quarter, a 57 percent increase. Results were in line with revised analysts estimates.
“During the quarter, we continued the integration of our founding companies and our post-IPO acquisitions into our operations,” said David Sullivan, chairman and chief executive officer. “We continue to identify new acquisition candidates that either strengthen our position in existing markets or represent strong entries into key new markets. In July, we purchased our second property manager in exclusive Hilton Head Island, doubling our share of rental units there. Yesterday we announced our first acquisition in Orlando, Florida, one of the most popular resort vacation markets in the world and a “must” destination for us. This purchase of the largest and most established full-service, short-term rental property management company in central Florida, combined with our other six Florida locations, increases our holdings in the state to nearly 3,700 vacation rental units.
“During the quarter, we further diversified our portfolio with three acquisitions, including our second purchase in Arizona, and an acquisition in a new market for us: Lake Erie Islands, Ohio, a popular fishing and boating vacation resort market along the southern shore of Lake Erie. We also expanded our presence in Colorado with the acquisition of the area`s leading vacation property management and real estate company, with properties in Aspen and Snowmass Village. We now have a majority share of the vacation rental and real estate market in this key Colorado resort.”
Solid Operating Results
David Levine, president and chief operating officer, commenting on operating results, said, “Our Beach segment reported a 10.1 percent increase in total lodging revenues on a 6.4 percent increase in units and a 7.5 percent increase in occupied nights. Overall, on a comparable basis, occupied room nights were up 2.2 percent while occupancy percentage during the quarter was unchanged.”
“During the quarter, we enhanced our web site capabilities with virtual tours, which has generated increased interest and visits to our site,” Levine said. “We recorded a 26 percent increase in user sessions and booked 6 percent of our business through the Internet in the second quarter.”
Strong Balance Sheet
“During the second quarter, we completed the placement of $50 million of senior secured notes with five national insurance companies,” said Jeff Jarvis, ResortQuest`s senior vice president and chief financial officer. “The financing provided us with an additional source of cash and reduces our dependency on traditional bank financing. It also allowed us to pay off our revolving credit facility, which is now available to fund future acquisitions. At June 30, 1999, we had nearly $60 million in cash and credit available to us.
“In July, the Securities and Exchange Commission declared effective our new 5 million share common stock shelf registration statement, which will allow us to continue to issue registered common stock in connection with acquisitions,” Jarvis added.
First Six Months 1999 Results
For the first six months of 1999, pro forma net income rose 29 percent to $5.3 million from pro forma net income of $4.1 million in 1998. Pro forma revenue rose to $62.6 million from $52.3 million for the same period in 1998. Pro forma net income per diluted share was 30 cents, compared to 24 cents per diluted share for the first six months of 1998.
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 poolings 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 second quarter ended June 30, 1999 and 1998 includes the results of Aston Hotels & Resorts and the three acquisitions accounted for as poolings of interests 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 and post-IPO transactions since their respective effective dates of acquisition. 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-based ResortQuest International provides the first one-stop resource for vacation home and condominium rentals in 35 premier resort destinations in North America. ResortQuest`s total portfolio now comprises nearly 16,000 vacation rental properties. 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.; Phoenix, Scottsdale and Tucson, Ariz.; Palm Desert and Palm Springs, Calif.; Aspen, Breckenridge, Crested Butte, Dillon, Snowmass Village and Telluride, Colo.; Bethany Beach, Del.; Captiva Island, Destin, Ft. Myers, Ft. Walton Beach, Okaloosa Island, Orlando 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; Lake Erie Islands, Ohio; Sunriver, Ore.; Hilton Head Island, S.C.; Deer Valley, Park City and The Canyons, 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.