Pegasus Solutions, Inc. today reported its financial results for the three months ended June 30, 2003.
Second Quarter Financial Highlights
á Revenues of $42.9 million and breakeven GAAP net loss per share
á Diluted cash EPS of $0.07
á Adjusted EBITDA (excluding restructure and transition-related costs) of $7.6 million, or 18 percent of revenues
“We are pleased to report results that were in line with our prior expectations. We continue to prudently invest in technology and infrastructure so that we are positioned to outpace our competitors when the travel market fully recovers. Additionally, cost savings from our strategic integration are expected to further protect our margins and position us strongly for the eventual rebound,” said John F. Davis
III, president, chief executive officer and chairman of Pegasus Solutions. “As expected, the negative impact of the war in Iraq and SARS carried over into April and May, and our second quarter revenues clearly reflect these events. However, I am encouraged that June revenues began to show improvement. Based on June’s results, and with travel bookings apparently stabilizing, I am hopeful that we are beginning a recovery period, and ideally future reservation volumes will continue to improve.”
On a GAAP basis, the company reported second quarter 2003 revenues of $42.9 million and breakeven net loss per diluted share. This compares to revenues of $48.6 million and net loss per diluted share of $0.08 for the second quarter of 2002. Diluted cash earnings per share (EPS) for the second quarter 2003 was $0.07, compared to $0.11 for the same period in 2002. Reconciling items between GAAP net loss per share and cash EPS primarily consist of purchase accounting amortization and restructure costs.
Second quarter 2003 EBITDA was $4.6 million, or 11 percent of revenues, compared to $9.1 million, or 19 percent of revenues, in the second quarter of 2002. Adjusted for restructure costs and transition-related activities resulting from the company’s strategic integration, second quarter 2003 EBITDA was $7.6 million, or 18 percent of revenues. Despite a very difficult environment for the first half of the second quarter 2003, the company was able to preserve EBITDA margins through controlling discretionary costs. Schedules that reconcile cash EPS and adjusted EBITDA to the most directly comparable GAAP amounts are included with this release and the presentation accompanying the company’s conference call Webcast.
á Q3 2003 revenues estimated to range from $45 million to $47 million
á Q3 2003 cash EPS estimated to range from $0.18 to $0.21
á Reaffirms full year cash EPS guidance of $0.45 to $0.55
Commenting on the company’s outlook, Susan K. Cole, executive vice president and chief financial officer of Pegasus Solutions, said, “We were pleased to see some positive volume trends late in the second quarter, particularly in our Electronic Distribution service. Even though these positive developments have continued into the third quarter, it seems to be a gradual recovery in transaction volume. Although we are not experiencing it now, the high end of the range for our third quarter and full year guidance assumes some realization of pent-up demand.”
Davis concluded, “I am optimistic we have seen the bottom, and I have many reasons to be excited about our future. First, we appointed Robert J. Boles, Jr. to the newly created position of executive vice president of sales and marketing. Boles brings more than 20 years of technology sales and marketing experience to Pegasus and is charged with enhancing our sales strategy and expanding our market share. Second, with seasonality beginning to return to our business and with the economy beginning to firm up, I believe the demand for travel will increase. And finally, the proceeds from the recently announced debt offering give us more flexibility as we continue to seek opportunities to grow our business through enhancements to existing services, new product development or strategic acquisitions that complement our existing services and meet our return on investment criteria.”
To access today`s conference call Webcast, go to www.pegs.com
and click on “Investor.” The online archive of the Webcast will be available two hours after the call for 30 days.
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