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 results for the second quarter and six months ended June 30, 2000.
Net income for the three-month period rose 64.7 percent from $1.7 million to $2.8 million on a 31.6 percent increase in total revenues from $31.0 million to $40.8 million. Earnings per diluted share rose 50.0 percent to $0.15 per share, compared to $0.10 in the 1999 second quarter. Earnings per diluted share exceeded consensus analyst expectations.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 49.1 percent to $8.5 million, compared to $5.7 million in the 1999 second quarter. EBITDA per diluted share increased 40.6 percent to $0.45 versus $0.32 in the 1999 second quarter. å¦
“We just completed an outstanding quarter, as evidenced by our same-store, company-wide, gross lodging revenue growth of 14.5 percent,” said David Levine, chairman and chief executive officer. “Three of our four resort regions experienced same-store gross lodging revenue growth in excess of 15 percent. We now are reaping the benefits of our internal growth strategy by using our size and competitive advantage through our Internet inventory distribution, centralized marketing and integration efforts. Additionally, in the second quarter, we increased our total units under contract 15.2 percent as compared to the 1999 second quarter and are making significant strides to take further advantage of our size through economies of scale, management strength and depth, and purchasing power.
“We also received a modest boost from two cash acquisitions made late in the second quarter,” he noted. “We acquired companies in the Florida panhandle and North Carolina Outer Banks at the beginning of their busy season and at attractive multiples.”
Commenting on the business outlook, Levine said, “Advanced booking patterns for the third quarter are comfortably ahead of this time last year. Although weather is always an unpredictable variable, we remain optimistic about the remainder of the year. We also are very enthused by our e-commerce strategy, and we are starting to see real benefit. For the six months ended June 30, 2000, we averaged approximately 900,000 unique Internet user sessions per month and our average web-related bookings approximated 7.4 percent of total bookings, a threshold that is well above the lodging industry average.”
Second Quarter Operating Highlights: Consolidated revenues for the quarter were up 31.6 percent from $31.0 million to $40.8 million, fueled by significant revenue growth within the company`s geographic regions. The Beach and Mountain resorts, which were aided by acquisitions, led the way with revenue increases greater than 35 percent, followed by the Hawaii resorts at 22.4 percent and the Desert resorts at 16.5 percent.
“We experienced a very positive quarter, with total revenues increasing $9.8 million, with all of our geographic regions participating,” said Jim Olin, chief operating officer. “Approximately 75 percent of the $9.8 million increase came from our Beach resorts, while Hawaii and the Mountain resorts contributed $1.1 million and $1.4 million, respectively. General and administrative expenses decreased as a percentage of revenues in all our regions as a result of our integration efforts.”
Consolidated EBITDA increased 49.1 percent over the 1999 second quarter to $8.5 million; excluding the impact of acquisitions, same store EBITDA increased 22.5 percent over the 1999 second quarter. This increase in EBITDA over the 1999 second quarter was led by a 64.3 percent increase at our Hawaii resorts and a 38.1 percent increase at our Beach resorts. The Mountain and Desert resorts also experienced EBITDA gains over the 1999 second quarter of 37.2 percent and 14.7 percent, respectively.
“We are beginning to see significant benefits from our marketing programs to increase units under contract in all of our resort locations,” Olin added. “We also are taking the best practices at our most successful operations and implementing them at our other locations with very positive results.”
On a comparable same-store basis, ResortQuest reported a 14.5 percent increase in gross lodging revenues, which was primarily driven by a 4.8 percent increase in average daily rate (ADR) and a 9.4 percent increase in occupied nights. The Beach resorts enjoyed a 16.4 percent increase in gross lodging revenues, with occupied room nights increasing 12.2 percent and ADR up 3.8 percent. Gross lodging revenues at the company`s Hawaii resorts advanced 16.1 percent due to a 2.3 percent increase in units, a 6.7 percent increase in rate, and an 8.8 percent increase in total occupied nights. The Desert resorts reported a 16.0 percent increase in gross lodging revenues, primarily the result of a 16.2 percent increase in units. The Mountain resorts experienced a decline in gross lodging revenues due to the lack of snow that impacted occupancy in April and the timing of spring break. However, same store EBITDA increased 12.9 percent due to operating efficiencies.
Conservative Balance Sheet: “Through more effective cash management, we strengthened our balance sheet in the second quarter by reducing our debt an additional $3.1 million, which has helped lower our net interest expense,” said Mitch Collins, chief financial officer. “Since year-end 1999, we have reduced our long-term debt approximately $18 million or 26 percent, which is especially impressive considering we completed $3.1 million in cash acquisitions during the second quarter. Our debt to equity ratio is now a very conservative 38.4 percent.
“ResortQuest is in an excellent, flexible position with its strong cash flow, and at the end of the second quarter we had $50 million available under our credit facility to make selected, strategic acquisitions and for continued integration programs,” he noted. “We will continue to implement more effective operating and accounting systems over the next year, which should allow us to further improve the management of our inventory and costs.”
Six Months Results: For the six months ended June 30, 2000, total revenues advanced 26.7 percent to $79.4 million. Net income for the six-month period rose 20.0 percent to $5.7 million. Earnings per diluted share rose 11.1 percent to $0.30 per share, compared to $0.27 in the first six months of 1999.
EBITDA rose 26.9 percent to $17.0 million, compared to $13.4 in the first six months of 1999. EBITDA per diluted share increased 20.0 percent to $0.90 versus $0.75 in the prior year`s reporting period.