ResortQuest International, Inc. (NYSE: RZT), the first brand name and online booking service (www.resortquest.com) in vacation condominium and home rentals, sales and property management services, today announced record results for the third quarter and nine months ended September 30, 2000.
“We just completed our best quarter ever, in terms of total revenue, earnings before interest, taxes, depreciation and amortization (EBITDA) and earnings per share,” said David Levine, chairman, president and chief executive officer. “This record quarter was fueled by a 10.2 percent increase in same-store, company-wide, gross lodging revenue which led to earnings per share of $0.34, which was ahead of First Call analyst expectations for the second consecutive quarter. We are especially pleased with the 2000 third quarter as it eclipses our record third quarter last year.
“Same-store lodging revenues increased at three of our four resort regions, with Hawaii leading the charge in producing lodging revenue growth of nearly 20 percent. Overall, we were extremely pleased with these results and expect to take advantage of additional synergies as we continue to integrate our operating companies.”
Net income for the three-month period rose 13.1 percent from $5.7 million in 1999 to $6.4 million in 2000 on an 11.8 percent increase in total revenues from $42.1 million in 1999 to $47.0 million in 2000. Earnings per diluted share rose 9.7 percent to $0.34 per share, compared to $0.31 per share in the 1999 third quarter. EBITDA rose 8.5 percent to $14.8 million, compared to $13.6 million in the 1999 third quarter. EBITDA per diluted share was $0.77 for the third quarter.
Jim Olin, chief operating officer, noted that the company continues to take advantage of its geographic diversity. “The geographic dispersion of our units significantly increases the value proposition of ResortQuest. Our Beach resorts perfectly illustrate this advantage. For the third quarter, same-store lodging revenues at our Beach resorts grew by 6.2 percent. When you dissect the data, our East Coast properties, where consumer demand in certain areas was affected by hurricane predictions, experienced a moderate 4.3 percent increase in same-store lodging revenues. However, our remaining Beach properties (primarily in the Florida gulf area) experienced an 8.0 percent increase in same-store lodging revenues, which more than offset the softer East Coast demand.
Fred Farmer, senior vice president e-commerce and chief information officer, said that recently the company unveiled its second generation web site that enhances the booking experience for e-travelers. In addition to detailed property descriptions, virtual tours, interior and exterior photos and floor plans, and local information available at the original web site, vacationers can search for properties by date, activity, event or location; comparison shop among similar vacation rental units; check for special discounts and promotions; and obtain maps and driving directions. The site also allows foreign travelers to obtain currency conversion rates. “We expect enhancements like these to further increase brand loyalty and build greater brand awareness for us both domestically and internationally. We will continue to seek meaningful Internet alliances.”
“We have experienced phenomenal growth in our Internet distribution,” Farmer added. “For the first nine months of this year, our unique visitors via the Internet increased 107 percent over the same period in 1999. Resortquest.com has enjoyed almost 23.3 million page views this year, a 133 percent increase over prior year. Our web-related bookings approximated 8 percent of our total bookings during the quarter, an amount well above the lodging industry average.”
“From an internal standpoint, we have made tremendous progress in financial management this year,” said Mitch Collins, senior vice president and chief financial officer. “Our movement from a decentralized to a consolidated cash management structure has given us greater control over our cash flow, which has led to a dramatic reduction in our interest expense for the third quarter as compared to the prior year. We have strengthened our reporting, forecasting and budgeting functions and recently selected J. D. Edwards to serve as our financial management technology platform. Eight of our 28 operating companies should be converted by year end, with the remaining companies being converted by the middle of next year.”
Collins also observed that ResortQuest continues to maintain a strong balance sheet. “At September 30, 2000, ResortQuest had $17.4 million in cash and cash equivalents and $50 million available under its credit facility. Our strong liquidity will continue to allow ResortQuest the flexibility to pursue selected strategic acquisitions and to fulfill its technology capital requirements.”
Levine noted that the company completed its third acquisition of the year in July as it entered the legendary Sun Valley, Idaho market. “We continue to seek selected, timely and strategic acquisitions in new or tuck-in markets,” he said.
“During the quarter, we took additional steps to build on the momentum we have achieved year to date. We added further depth to our board of directors and our management team with the election to our board of Colin Reed, chief financial officer and a member of the Office of the President of Harrah`s Entertainment, Inc., and the appointment of Bob Adams as our new vice president of sales and marketing. Colin Reed brings with him more than 20 years of hospitality and financial experience and special expertise in customer relations and customer loyalty initiatives that will be invaluable.
“Bob Adams is a 22-year industry marketing veteran, with specific experience in database management,” said Levine. “Bob will play a key role in managing and leveraging the impressive reservoir of proprietary data and research ResortQuest is accumulating on our industry and specific markets. We believe this research represents a significant competitive advantage and will help us more finely tune our operating strategies, define the best acquisition candidates and develop more targeted marketing.”
Nine Months Results
For the nine months ended September 30, 2000, total revenues advanced 20.7 percent to $126.4 million. Net income for the nine-month period rose 16.3 percent to $12.1 million. Earnings per diluted share rose 10.3 percent to $0.64 per share, compared to $0.58 in the first nine months of 1999.
EBITDA rose 17.5 percent to $31.8 million, compared to $27.0 million in the first nine months of 1999. EBITDA per diluted share increased 11.3 percent to $1.67 versus $1.50 in the prior year`s reporting period.