PRNewswire-FirstCall LAS VEGAS Nov. 17 :
Sunterra Corporation (BULLETIN BOARD: SNRR) , reported its third quarter
and nine month results.
Sunterra earned net income of $4.3 million or $0.21 per share, in the
three months ended September 2003. This compares to a combined $327.3
million in the prior year. Results for the third quarter 2003 included a
$1.4 million impairment charge for the write-down of certain long-lived
assets under SFAS 144. The prior year balance includes $239.2 million of
gains on settlement and cancellation of debt and pre-petition liabilities
and $112.7 million of fresh start adjustments, in connection with the
Company`s emergence from bankruptcy in July 2002. Excluding these items,
the three-month net loss of the combined Predecessor
(debtor-in-possession) entity for the one-month ended July 31, 2002 and
the Successor entity for the two months ended September 30, 2002 would
have been $24.6 million.
Total revenues continued the trend of earlier quarters, rising from a
combined $81.1 million for the three months ended September 30, 2002 to
$86.1 million for the same period in the current year, an increase of $4.9
million or 6.0%. Domestic operations produced three-month revenues of
$55.6 million, up from $53.1 million in the third quarter of 2002. Our
foreign operations logged $30.5 million of total revenue in the 2003 third
quarter, compared to $28.1 million in 2002.
On a consolidated basis, Vacation Interest revenues improved to $63.8
million from $54.9 million for the quarters ended September 30, 2003 and
2002, respectively. Our domestic resorts produced $38.6 million and $31.7
million, respectively, for these periods and our foreign operations
generated $25.2 million and $23.2 million, respectively.
Sunterra`s third quarter Earnings Before Interest, Taxes, Depreciation and
Amortization, Reorganization and Restructuring (EBITDAR—See attached
table for reconciliation of net income to EBITDAR) increased 290%, or
$16.3 million, from $5.6 million in the third quarter 2002 to $21.9
million in 2003. This information is provided because management uses it
to monitor and assess the Company`s performance and believes this
information to be helpful to investors in understanding and evaluating the
Company. Management believes these results are reflective of the
cost-reduction and process improvement initiatives implemented as part our
restructuring, as well as increased effectiveness by the sales team and
increasing consumer awareness of vacation ownership products.
Nicholas Benson, President and Chief Executive Officer of Sunterra,
commented that the third quarter results were “yet another indicator that
Sunterra has followed through on our restructuring plans and will continue
to improve our results and our value to all of our stakeholders.”
The Company`s net income for the nine months ended September 30, 2003 was
$2.8 million, compared to a combined $314.3 million in the prior year. The
2002 amount includes $253.9 million of gains on settlement and
cancellation of debt and pre-petition liabilities and $112.7 million of
fresh start adjustments, in connection with the Company`s emergence from
bankruptcy in July 2002. Excluding these items, the nine-month net loss of
the combined Predecessor (debtor-in-possession) entity for the
seven-months ended July 31, 2002 and the Successor entity for the two
months ended September 30, 2002 would have been $52.4 million.
Sunterra generated $228.4 million in consolidated revenues in the first
three quarters of 2003, an increase of $15.9 million or 7.5% over the
prior year. Overall revenues for domestic operations increased $8.6
million or 6.2%, to $147.1 million for the nine months ended September 30,
2003 compared to $138.5 million for the same period in 2002. For the same
periods, revenues from foreign operations increased $7.3 million or 9.8%,
to $81.3 million for 2003 compared to $74.0 million in 2002.
Consolidated Vacation Interest revenues were $160.7 million and $137.0
million for the nine months ended September 30, 2003 and 2002,
respectively, equating to a current year increase of $23.7 million or
17.3%, over the 2002 period. Our domestic operations realized a $17.4
million or 22.6% increase in the current year, posting $94.4 million in
Vacation Interest revenues for the first three quarters of 2003, compared
to a combined $77.0 million for the same period in 2002. Our European team
generated $66.3 million of Vacation Interest revenues in the nine months
ended September 30, 2003, up $6.3 million or 10.4%, from the comparable
2002 period results of $60.0 million.
Similar to the third quarter results, the Company posted a $25.2 million
or 203.4%, increase in nine-month EBITDAR, from $12.4 million for the
combined 2002 nine months to $37.6 million for the same period in 2003.
This information is provided because management uses it to monitor and
assess the Company`s performance and believes this information to be
helpful to investors in understanding and evaluating the Company. Similar
to the second quarter results, the improvements are related to our sales
and marketing initiatives (which helped to drive Vacation Interest
revenues $14.7 million higher in the first half of 2003), emergence from
reorganization, several restructuring initiatives that streamlined
administrative costs and lowered vendor outlays and efficiencies gained
from the consolidation of the Company`s offices to Las Vegas, Nevada.
Sunterra will host a conference call, broadcast live and accessible by
telephone or webcast, on Monday, November 17, 2003, at 8:00 a.m. Pacific
Standard Time. Chief Executive Officer Nicholas J. Benson and Chief
Financial Officer Steven E. West will discuss Sunterra`s third quarter
results and the Company`s business.
To access the audio portion of the call, dial (800) 857-5485 in the United
States or 773-756-4632 for international toll access. Participants can
also access the event over the World Wide Web at
Participants who wish to make inquiries during Question and Answer portion
of the event must register to do so using the following:
1. Go to https://e-meetings.mci.com/ and choose Web RSVP under Join
2. Enter 8142859 as the conference number and SUNTERRA as the passcode.
3. Provide your information for the event leader and then click submit.
If you are unable to participate during the live event, the web and audio
portions will be available on archive shortly after the call.
Sunterra Corporation is one of the world`s largest vacation ownership
companies, with over 315,000 vacation owner families and 87 affiliated
resort locations in the continental United States, Europe, the Caribbean,
Hawaii and Mexico. A copy of this press release announcing our earnings
will be available in the Investor Relations section of our website at