In preparation for WYN's 3Q earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.
Wyndham Vacation Ownership Acquires Shell Vacations LLC (9/14)
- Purchase price: $102 million cash
- Acquisition includes $153 million of debt, which is primarily related to consumer loan receivables.
- “This tuck-in acquisition is immediately accretive to earnings and generates meaningful cash flow as well as a healthy rate of return. With strong fee-for-service revenues, this acquisition is consistent with our capital-light strategy.”
- “We've made significant progress over the past two years with one of our key Apollo initiatives, brand.com. Revenue in room nights across the brand portfolio are up approximately 20% from this channel year-to-date in part due to improved content and Web functionality.”
- “Over the next five years, we expect annual system size growth of 8% in EMEA, 15% in Latin America and our highest growth market will be A-Pac where we expect our system size to almost double by 2016. This is from an exceptionally strong base in the region, particularly in China where we have close to 60,000 rooms.”
- “We completed another successful release of rci.com, which included an upgrade to an innovative click-to-chat functionality with multiple language support. From when we started the project in the first quarter of 2008, through the end of 2012, we expect our migration to online transactions to improve our exchange in rentals margin by over 225 basis points.”
- “We expect that our available cash for the year, which includes net proceeds from ABS Financings, and assumes we'll calibrate leverage to our increased EBITDA, will be approximately $1 billion."
- “We expect 3,022 rooms from the HPT transaction that Steve mentioned earlier, to enter the system on August 1. And that overall pipeline activity is up 3% YoY and 5% sequentially.”
- “We are committed to EBITDA growth of 6% to 8% with high single to low double-digit growth in the Hotel Group and mid single-digit growth in the Exchange & Rentals Group and Wyndham Vacation Ownership.”
- “We expect sustainable annual free cash flow of $600 million to $700 million. We remain committed to an investment grade profile, which will enable us to increase debt by $300 million for every $100 million that we add in EBITDA. The result is $1 billion of available cash to deploy each year to increase shareholder value.”
- “For the third quarter, we expect earnings per share to be $1.07 to $1.10. This is below the consensus, reflecting differences in both share repurchase assumptions and seasonality between the third and fourth quarters, however our guidance for the second half of the year is consistent with street expectations”
- “We've probably seen a little more activity recently, more deals seem to be coming to market, but it's not a dramatic change in the volume of our activity, and really kind of what has to change is the expectation of the other side because we're very disciplined. We're not going chase anything, so if deals don't make sense, they're not going to fit into our plan… I would probably characterize it as the pipeline is a little bit stronger than it was last year at this time.
- "The HPT deal was ”basically was built into our rooms guidance, and it's part of the reason that we're comfortable that we're going to get the growth that we've been talking about during the year to deliver in the second half”
- “We have pretty good booking visibility into the summer for the rental business, and we feel it's pretty consistent with what we've seen so far, that we're not going to see a huge uptick, but we're not seeing any decline that we think is meaningful. I think we'll be stable in that business just as we've been calling for all year long.”
- “We have seen a compression in the booking window.”
- “There's been a higher level of self-inflicted attrition where we're making the decision to kick people out over the last several years, frankly not just the last couple of quarters, the last several years, as the economy has been so difficult for the hotel owners and they've not been investing in their properties.”