Company Raises Full-Year 2024 EPS
Outlook
Grows Development Pipeline by 8% and System Size
by 4%
Board Increases Share Repurchase Authorization by
$400 Million
PARSIPPANY, N.J., April 24,
2024 /PRNewswire/ -- Wyndham Hotels & Resorts
(NYSE: WH) today announced results for the three months ended
March 31, 2024. Highlights include:
- Global RevPAR grew 1% in constant currency and ancillary
revenues grew 8% compared to first quarter 2023.
- System-wide rooms grew 4% year-over-year.
- Opened over 13,000 rooms, representing a year-over-year
increase of 27%.
- Awarded 171 development contracts, an increase of 8%
year-over-year.
- Development pipeline grew 1% sequentially and 8%
year-over-year to a record 243,000 rooms.
- Entered upscale extended stay segment through a strategic
relationship with WaterWalk Extended Stay by Wyndham.
- Net cash provided by operating activities of $76 million and adjusted free cash flow of
$102 million.
- Returned $89 million to
shareholders through $57 million of
share repurchases and quarterly cash dividends of $0.38 per share.
"We're thrilled to announce another strong quarter of progress
in our executions, openings, franchisee retention and net room
growth around the world," said Geoff
Ballotti, president and chief executive officer.
"Increased interest from hotel owners in our brands has propelled
our development pipeline to a record 243,000 rooms, marking an
impressive 8% increase. Our strong balance sheet and cash flow
generation capabilities provide significant opportunity to continue
to enhance returns to our shareholders over both the short and
long-term, as evidenced by our Board of Directors' approval of a
$400 million increase in our share
repurchase authorization."
System Size and Development
|
|
Rooms
|
|
|
March 31,
2024
|
|
March 31,
2023
|
|
YOY
Change (bps)
|
United
States
|
|
499,100
|
|
494,400
|
|
100
|
International
|
|
377,200
|
|
350,400
|
|
760
|
Global
|
|
876,300
|
|
844,800
|
|
370
|
The Company's global system grew 4%, reflecting 1% growth in the
U.S. and 8% internationally. As expected, these increases
included strong growth in both the higher RevPAR midscale and above
segments in the U.S. and the direct franchising business in
China, which grew 3% and 13%,
respectively. The Company remains solidly on track to achieve
its net room growth outlook of 3 to 4% for the full year 2024,
including an increase in its retention rate compared to
2023.
On March 31, 2024, the Company's
global development pipeline consisted of nearly 2,000 hotels and
approximately 243,000 rooms, representing another record-high level
and an 8% year-over-year increase. Key highlights
include:
- 15th consecutive quarter of sequential pipeline
growth
- 5% growth in the U.S. and 9% internationally
- Approximately 69% of the pipeline is in the midscale and above
segments, which grew 4% year-over-year
- Approximately 58% of the pipeline is international
- Approximately 79% of the pipeline is new construction, of which
approximately 35% has broken ground
RevPAR
|
|
First
Quarter 2024
|
|
YOY
Constant
Currency
% Change
|
United
States
|
|
$
41.68
|
|
(5 %)
|
International
|
|
29.38
|
|
14
|
Global
|
|
36.28
|
|
1
|
First quarter global RevPAR increased 1% in constant
currency compared to 2023, reflecting a 5% decline in the U.S. and
growth of 14% internationally.
In the U.S., the Company lapped the most difficult
year-over-year comparisons during the first quarter, resulting in a
decline of 440 basis points in occupancy and 50 basis points in
ADR. Notably, the Company saw improving trends in March with
RevPAR improving 240 basis points compared to February. This
improvement marks a significant pivot toward growth, preceding the
peak leisure travel season.
Internationally, the Company generated year-over-year RevPAR
growth for the first quarter in all regions primarily driven by
continued pricing power, with ADR up 12% and occupancy up 2%.
The largest contributors to first quarter growth were our
Latin America and EMEA
regions.
First Quarter Operating Results
- Fee-related and other revenues were $304
million compared to $308
million in first quarter 2023, reflecting a decline of
$5 million in royalty and franchise
fees, partially offset by an 8% increase in ancillary revenue
streams. The decline in royalties and franchise fees was primarily
driven by the decline in U.S. RevPAR and the lapping of our highest
quarter of other franchise fees, partially offset by global net
room growth and higher international RevPAR.
- The Company generated net income of $16
million compared to $67
million in first quarter 2023. The decrease primarily
reflects transaction-related expenses resulting from the
unsuccessful hostile takeover attempt by Choice Hotels, an
impairment charge primarily related to development advance notes
and higher interest expense.
- Adjusted EBITDA was $141 million
compared to $147 million in first
quarter 2023. This decrease included a $10
million unfavorable impact from marketing fund variability,
excluding which adjusted EBITDA grew 3% primarily reflecting
favorable timing of expenses to better match revenue
seasonality.
- Diluted earnings per share was $0.19 compared to $0.77 in first quarter 2023. This decrease
reflects lower net income, partially offset by the benefit of a
lower share count due to share repurchase activity.
- Adjusted diluted EPS was $0.78
compared to $0.86 in first quarter
2023. This decrease included $0.09
per share related to expected marketing fund variability (after
estimated taxes). On a comparable basis, adjusted diluted EPS
increased 1% year-over-year as comparable adjusted EBITDA growth
and the benefit of share repurchase activity were largely offset by
higher interest expense.
- During first quarter 2024, the Company's marketing fund
expenses exceeded revenues by $14
million, in line with expectations; while in first quarter
2023, the Company's marketing fund expenses exceeded revenues by
$4 million, resulting in $10 million of marketing fund variability. The
Company continues to expect marketing fund revenues to equal
expenses during full-year 2024.
Full reconciliations of GAAP results to the Company's non-GAAP
adjusted measures for all reported periods appear in the tables to
this press release.
Balance Sheet and Liquidity
The Company generated $76 million
of net cash provided by operating activities and adjusted free
cash flow of $102 million in first
quarter 2024. The Company ended the quarter with a cash
balance of $50 million and over
$580 million in total
liquidity.
The Company's net debt leverage ratio was 3.4 times at
March 31, 2024, within the lower half
of the Company's 3 to 4 times stated target range.
During the first quarter of 2024, the Company executed
$275 million of new forward starting
interest rate swaps on its Term Loan B Facility, which will begin
in fourth quarter 2024 and expire in 2027. The fixed rate of
the new swaps is 3.4%. As a result, nearly all the Company's
Term Loan B Facility now has a fixed rate through the end of
2027.
Share Repurchases and Dividends
During the first quarter, the Company repurchased approximately
719,000 shares of its common stock for $57
million. The Company's Board of Directors recently increased
the Company's share repurchase authorization by $400 million.
The Company paid common stock dividends of $32 million, or $0.38 per share, during first quarter 2024.
Full-Year 2024 Outlook
The Company is updating its outlook as follows to reflect the
impact of first quarter share repurchase activity:
|
|
Updated
Outlook
|
|
Prior
Outlook
|
Year-over-year rooms
growth
|
|
3 - 4%
|
|
3 - 4%
|
Year-over-year global
RevPAR growth
|
|
2 - 3%
|
|
2 - 3%
|
Fee-related and other
revenues
|
|
$1.43 - $1.46
billion
|
|
$1.43 - $1.46
billion
|
Adjusted
EBITDA
|
|
$690 - $700
million
|
|
$690 - $700
million
|
Adjusted net
income
|
|
$341 - $351
million
|
|
$341 - $351
million
|
Adjusted diluted
EPS
|
|
$4.18 -
$4.30
|
|
$4.11 -
$4.23
|
Adjusted free cash flow
conversion rate
|
|
~60%
|
|
~60%
|
|
|
|
|
|
|
|
|
|
|
NOTE: Outlook
for adjusted EBITDA, adjusted net income, adjusted diluted EPS and
adjusted free cash flow conversion rate excludes all expenses and
cash outlays associated with the unsuccessful hostile takeover
attempt by Choice Hotels.
|
Year-over-year growth rates for adjusted EBITDA, adjusted net
income and adjusted diluted EPS are not comparable due to full-year
2023 marketing fund revenues exceeding expenses by $9 million, which substantially completed the
recovery of the $49 million support
the Company provided to its owners during COVID. The Company
continues to expect marketing fund revenues to equal expenses
during full-year 2024 though seasonality of spend will affect the
quarterly comparisons throughout the year.
More detailed projections are available in Table 8 of this press
release. The Company is providing certain financial metrics
only on a non-GAAP basis because, without unreasonable efforts, it
is unable to predict with reasonable certainty the occurrence or
amount of all of the adjustments or other potential adjustments
that may arise in the future during the forward-looking period,
which can be dependent on future events that may not be reliably
predicted. Based on past reported results, where one or more
of these items have been applicable, such excluded items could be
material, individually or in the aggregate, to the reported
results.
Conference Call Information
Wyndham Hotels will hold a conference call with investors to
discuss the Company's results and outlook on Thursday, April 25, 2024 at 8:30 a.m. ET. Listeners can access the
webcast live through the Company's website at
https://investor.wyndhamhotels.com. The conference call may
also be accessed by dialing 800 225-9448 and providing the passcode
"Wyndham". Listeners are urged to call at least five minutes
prior to the scheduled start time. An archive of this webcast
will be available on the website beginning at noon ET on April
25, 2024. A telephone replay will be available for
approximately ten days beginning at noon
ET on April 25, 2024 at 800
839-8531.
Presentation of Financial Information
Financial information discussed in this press release includes
non-GAAP measures, which include or exclude certain items.
These non-GAAP measures differ from reported GAAP results and are
intended to illustrate what management believes are relevant
period-over-period comparisons and are helpful to investors as an
additional tool for further understanding and assessing the
Company's ongoing operating performance. The Company uses
these measures internally to assess its operating performance, both
absolutely and in comparison to other companies, and to make day to
day operating decisions, including in the evaluation of selected
compensation decisions. Exclusion of items in the Company's
non-GAAP presentation should not be considered an inference that
these items are unusual, infrequent or non-recurring. Full
reconciliations of GAAP results to the comparable non-GAAP measures
for the reported periods appear in the financial tables section of
this press release.
About Wyndham Hotels & Resorts
Wyndham Hotels & Resorts (NYSE: WH) is the world's largest
hotel franchising company by the number of properties, with
approximately 9,200 hotels across over 95 countries on six
continents. Through its network of over 876,000 rooms
appealing to the everyday traveler, Wyndham commands a leading
presence in the economy and midscale segments of the lodging
industry. The Company operates a portfolio of 25 hotel
brands, including Super 8®, Days Inn®, Ramada®, Microtel®, La
Quinta®, Baymont®, Wingate®, AmericInn®, Hawthorn Suites®,
Trademark Collection® and Wyndham®. The Company's
award-winning Wyndham Rewards loyalty program offers approximately
108 million enrolled members the opportunity to redeem points at
thousands of hotels, vacation club resorts and vacation rentals
globally. For more information, visit
https://investor.wyndhamhotels.com. The Company may use its
website and social media channels as means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD. Disclosures of this nature will be
included on the Company's website in the Investors section, which
can currently be accessed at https://investor.wyndhamhotels.com or
on the Company's social media channels, including the Company's
LinkedIn account which can currently be accessed
at https://www.linkedin.com/company/wyndhamhotels.
Accordingly, investors should monitor this section of the Company's
website and the Company's social media channels in addition to
following the Company's press releases, filings submitted with the
Securities and Exchange Commission and any public conference calls
or webcasts.
Forward-Looking Statements
This press release contains "forward-looking statements"
within the meaning of the federal securities laws, including
statements related to Wyndham's current views and expectations with
respect to its future performance and operations, including
revenues, earnings, cash flow and other financial and operating
measures, share repurchases and dividends and restructuring
charges. All statements other than historical facts are
forward-looking statements. Forward-looking statements include
those that convey management's expectations as to the future based
on plans, estimates and projections at the time Wyndham makes the
statements and may be identified by words such as "will," "expect,"
"believe," "plan," "anticipate," "predict," "intend," "goal,"
"future," "forward," "remain," "outlook," "guidance," "target,"
"objective," "estimate," "projection" and similar words or
expressions, including the negative version of such words and
expressions. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors, which may cause the
actual results, performance or achievements of Wyndham to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release.
Factors that could cause actual results to differ materially
from those in the forward-looking statements include, without
limitation, general economic conditions, including inflation,
higher interest rates and potential recessionary pressures; global
or regional health crises or pandemics (such as the COVID19
pandemic) including the resulting impact on Wyndham's business,
operations, financial results, cash flows and liquidity, as well as
the impact on its franchisees, guests and team members, the
hospitality industry and overall demand for and restrictions on
travel; the performance of the financial and credit markets; the
economic environment for the hospitality industry; operating risks
associated with the hotel franchising business; Wyndham's
relationships with franchisees; the impact of war, terrorist
activity, political instability or political strife, including the
ongoing conflicts between Russia
and Ukraine and between
Israel and Hamas, respectively;
Wyndham's ability to satisfy obligations and agreements under its
outstanding indebtedness, including the payment of principal and
interest and compliance with the covenants thereunder; risks
related to Wyndham's ability to obtain financing and the terms of
such financing, including access to liquidity and capital; and
Wyndham's ability to make or pay, plans for and the timing and
amount of any future share repurchases and/or dividends, as well as
the risks described in Wyndham's most recent Annual Report on Form
10-K filed with the Securities and Exchange Commission and any
subsequent reports filed with the Securities and Exchange
Commission. These risks and uncertainties are not the only ones
Wyndham may face and additional risks may arise or become material
in the future. Wyndham undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of
new information, subsequent events or otherwise, except as required
by law.
Table
1
|
WYNDHAM HOTELS &
RESORTS
|
INCOME
STATEMENT
|
(In millions, except
per share data)
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Net
revenues
|
|
|
|
Royalties and
franchise fees
|
$
116
|
|
$
121
|
Marketing, reservation
and loyalty
|
117
|
|
120
|
Management and other
fees
|
2
|
|
3
|
License and other
fees
|
26
|
|
23
|
Other
|
43
|
|
41
|
Fee-related and other
revenues
|
304
|
|
308
|
Cost
reimbursements
|
1
|
|
5
|
Net revenues
|
305
|
|
313
|
|
|
|
|
Expenses
|
|
|
|
Marketing, reservation
and loyalty
|
131
|
|
124
|
Operating
|
19
|
|
20
|
General and
administrative
|
28
|
|
30
|
Cost
reimbursements
|
1
|
|
5
|
Depreciation and
amortization
|
20
|
|
19
|
Transaction-related
|
41
|
|
—
|
Impairment
|
12
|
|
—
|
Restructuring
|
3
|
|
—
|
Separation-related
|
—
|
|
2
|
Total
expenses
|
255
|
|
200
|
|
|
|
|
Operating
income
|
50
|
|
113
|
Interest expense,
net
|
28
|
|
22
|
|
|
|
|
Income before income
taxes
|
22
|
|
91
|
Provision for income
taxes
|
6
|
|
24
|
Net
income
|
$
16
|
|
$
67
|
|
|
|
|
Earnings per
share
|
|
|
|
Basic
|
$
0.20
|
|
$
0.77
|
Diluted
|
0.19
|
|
0.77
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
Basic
|
81.2
|
|
86.5
|
Diluted
|
81.8
|
|
87.1
|
Table
2
|
WYNDHAM HOTELS &
RESORTS
|
HISTORICAL REVENUE
AND ADJUSTED EBITDA BY SEGMENT
|
|
|
|
The reportable segment
presented below represents our operating segment for which separate
financial information is available and is utilized on a
regular basis by our chief operating decision maker to assess
performance and allocate resources. In identifying our reportable
segment, we also
consider the nature of services provided by our operating segment.
Management evaluates the operating results of our reportable
segment based
upon net revenues and adjusted EBITDA. We believe that adjusted
EBITDA is a useful measure of performance for our segment which,
when
considered with GAAP measures, allows a more complete understanding
of our operating performance. We use this measure internally to
assess
operating performance, both absolutely and in comparison to other
companies, and to make day to day operating decisions, including in
the evaluation
of selected compensation decisions. Our presentation of adjusted
EBITDA may not be comparable to similarly-titled measures used by
other companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Full
Year
|
Hotel
Franchising
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
|
2024
|
$
305
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
313
|
|
$
362
|
|
$
402
|
|
$
321
|
|
$
1,397
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
2024
|
$
158
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
164
|
|
$
175
|
|
$
215
|
|
$
173
|
|
$
727
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and
Other
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
|
2024
|
$
—
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
$
—
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
2024
|
$
(17)
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
(17)
|
|
$
(17)
|
|
$
(15)
|
|
$
(19)
|
|
$
(68)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Company
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
|
|
|
|
|
|
|
|
2024
|
$
305
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
313
|
|
$
362
|
|
$
402
|
|
$
321
|
|
$
1,397
|
|
Net
income
|
|
|
|
|
|
|
|
|
|
|
2024
|
$
16
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
67
|
|
$
70
|
|
$
103
|
|
$
50
|
|
$
289
|
|
Adjusted
EBITDA
|
|
|
|
|
|
|
|
|
|
|
2024
|
$
141
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
147
|
|
$
158
|
|
$
200
|
|
$
154
|
|
$
659
|
|
|
|
|
|
|
|
|
|
|
NOTE:
Amounts may not add across due to rounding. See Table 7 for
reconciliations of Total Company non-GAAP measures and Table 9 for
definitions.
|
Table
3
|
WYNDHAM HOTELS &
RESORTS
|
CONDENSED CASH
FLOWS
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Operating
activities
|
|
|
|
Net income
|
$
16
|
|
$
67
|
Depreciation and
amortization
|
20
|
|
19
|
Payments of
development advance notes, net
|
(31)
|
|
(13)
|
Working capital and
other, net
|
71
|
|
20
|
Net cash provided by
operating activities
|
76
|
|
93
|
Investing
activities
|
|
|
|
Property and equipment
additions
|
(9)
|
|
(9)
|
Loan
advances
|
(15)
|
|
—
|
Net cash used in
investing activities
|
(24)
|
|
(9)
|
Financing
activities
|
|
|
|
Proceeds from
long-term debt
|
48
|
|
—
|
Payments of long-term
debt
|
(8)
|
|
—
|
Dividends to
shareholders
|
(32)
|
|
(31)
|
Repurchases of common
stock
|
(55)
|
|
(54)
|
Other, net
|
(20)
|
|
(10)
|
Net cash used in
financing activities
|
(67)
|
|
(95)
|
Effect of changes in
exchange rates on cash, cash equivalents and restricted
cash
|
(1)
|
|
—
|
Net decrease in cash,
cash equivalents and restricted cash
|
(16)
|
|
(11)
|
Cash, cash equivalents
and restricted cash, beginning of period
|
66
|
|
161
|
Cash, cash equivalents
and restricted cash, end of period
|
$
50
|
|
$
150
|
Free Cash
Flow:
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Net cash provided by
operating activities
|
$
76
|
|
$
93
|
Less: Property and
equipment additions
|
(9)
|
|
(9)
|
Plus: Payments of
development advance notes, net
|
31
|
|
13
|
Free cash
flow
|
98
|
|
97
|
Plus:
Transaction-related payments
|
4
|
|
—
|
Adjusted free cash
flow
|
$
102
|
|
$
97
|
Table
4
|
WYNDHAM HOTELS &
RESORTS
|
BALANCE SHEET
SUMMARY AND DEBT
|
(In
millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
As of
March 31,
2024
|
|
As of
December 31,
2023
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
50
|
|
$
66
|
Trade receivables,
net
|
|
|
248
|
|
241
|
Property and equipment,
net
|
|
|
83
|
|
88
|
Goodwill and intangible
assets, net
|
|
|
3,096
|
|
3,104
|
Other current and
non-current assets
|
|
|
587
|
|
534
|
Total assets
|
|
|
$
4,064
|
|
$
4,033
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
Total debt
|
|
|
$
2,241
|
|
$
2,201
|
Other current
liabilities
|
|
|
485
|
|
422
|
Deferred income tax
liabilities
|
|
|
325
|
|
325
|
Other non-current
liabilities
|
|
|
339
|
|
339
|
Total
liabilities
|
|
|
3,390
|
|
3,287
|
Total stockholders'
equity
|
|
|
674
|
|
746
|
Total liabilities and
stockholders' equity
|
|
|
$
4,064
|
|
$
4,033
|
|
|
|
|
|
|
Our outstanding debt
was as follows:
|
|
|
|
|
|
|
Weighted Average
Interest Rate (a)
|
|
As of
March 31,
2024
|
|
As of
December 31,
2023
|
$750 million revolving
credit facility (due April 2027)
|
7.2 %
|
|
$
208
|
|
$
160
|
$400 million term loan
A (due April 2027)
|
7.2 %
|
|
379
|
|
384
|
$1.1 billion term loan
B (due May 2030)
|
4.1 %
|
|
1,121
|
|
1,123
|
$500 million 4.375%
senior unsecured notes (due August 2028)
|
4.4 %
|
|
495
|
|
495
|
Finance
leases
|
4.5 %
|
|
38
|
|
39
|
Total debt
|
5.0 %
|
|
2,241
|
|
2,201
|
Cash and cash
equivalents
|
|
|
50
|
|
66
|
Net debt
|
|
|
$
2,191
|
|
$
2,135
|
Net debt leverage
ratio
|
|
|
3.4x
|
|
3.2x
|
|
|
|
|
|
|
|
|
|
|
(a) Represents weighted
average interest rates for the first quarter 2024, including the
effects of hedging.
|
Our outstanding debt
as of March 31, 2024 matures as follows:
|
|
|
Amount
|
Within 1
year
|
$
37
|
Between 1 and 2
years
|
48
|
Between 2 and 3
years
|
48
|
Between 3 and 4
years
|
526
|
Between 4 and 5
years
|
515
|
Thereafter
|
1,067
|
Total
|
$
2,241
|
Table
5
|
WYNDHAM HOTELS &
RESORTS
|
REVENUE
DRIVERS
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2024
|
|
2023
|
|
Change
|
|
%
Change
|
|
|
Beginning Room Count
(January 1)
|
|
|
|
|
|
|
|
|
|
United
States
|
497,600
|
|
493,800
|
|
3,800
|
|
1 %
|
|
|
International
|
374,200
|
|
348,700
|
|
25,500
|
|
7
|
|
|
Global
|
871,800
|
|
842,500
|
|
29,300
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions
|
|
|
|
|
|
|
|
|
|
United
States
|
7,000
|
|
6,100
|
|
900
|
|
15
|
|
|
International
|
6,100
|
|
4,200
|
|
1,900
|
|
45
|
|
|
Global
|
13,100
|
|
10,300
|
|
2,800
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
Deletions
|
|
|
|
|
|
|
|
|
|
United
States
|
(5,500)
|
|
(5,500)
|
|
—
|
|
—
|
|
|
International
|
(3,100)
|
|
(2,500)
|
|
(600)
|
|
(24)
|
|
|
Global
|
(8,600)
|
|
(8,000)
|
|
(600)
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
Ending Room Count
(March 31)
|
|
|
|
|
|
|
|
|
|
United
States
|
499,100
|
|
494,400
|
|
4,700
|
|
1
|
|
|
International
|
377,200
|
|
350,400
|
|
26,800
|
|
8
|
|
|
Global
|
876,300
|
|
844,800
|
|
31,500
|
|
4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March
31,
|
|
FY 2023
Royalty
Contribution
|
|
2024
|
|
2023
|
|
Change
|
|
%
Change
|
|
System
Size
|
|
|
|
|
|
|
|
|
|
United
States
|
|
|
|
|
|
|
|
|
|
Economy
|
229,700
|
|
233,600
|
|
(3,900)
|
|
(2 %)
|
|
|
Midscale and Upper
Midscale
|
248,600
|
|
241,700
|
|
6,900
|
|
3
|
|
|
Upscale and
Above
|
20,800
|
|
19,100
|
|
1,700
|
|
9
|
|
|
Total United
States
|
499,100
|
|
494,400
|
|
4,700
|
|
1 %
|
|
80 %
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
Greater
China
|
172,300
|
|
162,100
|
|
10,200
|
|
6 %
|
|
3
|
Rest of Asia
Pacific
|
35,300
|
|
30,500
|
|
4,800
|
|
16
|
|
2
|
Europe, the Middle
East and Africa
|
89,000
|
|
79,800
|
|
9,200
|
|
12
|
|
7
|
Canada
|
39,800
|
|
39,500
|
|
300
|
|
1
|
|
5
|
Latin
America
|
40,800
|
|
38,500
|
|
2,300
|
|
6
|
|
3
|
Total
International
|
377,200
|
|
350,400
|
|
26,800
|
|
8 %
|
|
20
|
|
|
|
|
|
|
|
|
|
|
Global
|
876,300
|
|
844,800
|
|
31,500
|
|
4 %
|
|
100 %
|
Table 5
(continued)
|
WYNDHAM HOTELS &
RESORTS
|
REVENUE
DRIVERS
|
|
|
|
|
|
|
|
Three Months
Ended
March 31, 2024
|
|
Constant
Currency
% Change
(a)
|
|
|
Regional RevPAR
Growth
|
|
|
|
|
|
United
States
|
|
|
|
|
|
Economy
|
$
32.95
|
|
(8 %)
|
|
|
Midscale and Upper
Midscale
|
47.53
|
|
(4)
|
|
|
Upscale and
Above
|
87.59
|
|
1
|
|
|
Total United
States
|
$
41.68
|
|
(5 %)
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
Greater
China
|
$
14.84
|
|
10 %
|
|
|
Rest of Asia
Pacific
|
31.57
|
|
5
|
|
|
Europe, the Middle
East and Africa
|
42.32
|
|
10
|
|
|
Canada
|
41.39
|
|
1
|
|
|
Latin
America
|
52.48
|
|
41
|
|
|
Total
International
|
$
29.38
|
|
14 %
|
|
|
|
|
|
|
|
|
Global
|
$
36.28
|
|
1 %
|
|
|
|
|
|
|
|
|
|
Three Months
Ended March 31,
|
|
|
|
2024
|
|
2023
|
|
% Change
(b)
|
Average Royalty
Rate
|
|
|
|
|
|
United
States
|
4.6 %
|
|
4.5 %
|
|
3 bps
|
International
|
2.4 %
|
|
2.3 %
|
|
11 bps
|
Global
|
3.8 %
|
|
3.9 %
|
|
(4 bps)
|
|
|
|
|
|
|
|
|
|
|
(a) International and global
exclude the impact of currency exchange movements.
|
(b) Amounts may not
recalculate due to rounding.
|
Table 6
WYNDHAM HOTELS & RESORTS
HISTORICAL REVPAR AND ROOMS
|
|
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Full
Year
|
Total
System
|
|
|
|
|
|
|
|
|
|
|
|
Global
RevPAR
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
$
36.28
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
|
$
37.20
|
|
$
46.47
|
|
$
49.71
|
|
$
38.90
|
|
$
43.10
|
|
U.S.
RevPAR
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
$
41.68
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
|
$
43.84
|
|
$
55.26
|
|
$
58.46
|
|
$
44.06
|
|
$
50.42
|
|
International
RevPAR
|
|
|
|
|
|
|
|
|
|
2024
|
|
$
29.38
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
|
$
27.99
|
|
$
34.44
|
|
$
38.05
|
|
$
32.12
|
|
$
33.21
|
|
Global
Rooms
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
876,300
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
|
844,800
|
|
851,500
|
|
858,000
|
|
871,800
|
|
871,800
|
|
U.S.
Rooms
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
499,100
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
|
494,400
|
|
495,100
|
|
495,700
|
|
497,600
|
|
497,600
|
|
International
Rooms
|
|
|
|
|
|
|
|
|
|
2024
|
|
377,200
|
|
n/a
|
|
n/a
|
|
n/a
|
|
n/a
|
|
2023
|
|
350,400
|
|
356,400
|
|
362,300
|
|
374,200
|
|
374,200
|
Table
7
|
WYNDHAM HOTELS &
RESORTS
|
NON-GAAP
RECONCILIATIONS
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
The tables below
reconcile certain non-GAAP financial measures. The presentation of
these adjustments is intended to permit the comparison of
particular adjustments as they appear in the income statement in
order to assist investors' understanding of the overall impact of
such adjustments.
We believe that adjusted EBITDA, adjusted net income and adjusted
diluted EPS financial measures provide useful information to
investors about
us and our financial condition and results of operations because
these measures are used by our management team to evaluate our
operating
performance and make day-to-day operating decisions and adjusted
EBITDA is frequently used by securities analysts, investors and
other interested
parties as a common performance measure to compare results or
estimate valuations across companies in our industry. These
measures also assist
our investors in evaluating our ongoing operating performance for
the current reporting period and, where provided, over different
reporting periods,
by adjusting for certain items which may be recurring or
non-recurring and which in our view do not necessarily reflect
ongoing performance. We also
internally use these measures to assess our operating performance,
both absolutely and in comparison to other companies, and in
evaluating or
making selected compensation decisions. These supplemental
disclosures are in addition to GAAP reported measures. These
non-GAAP reconciliation
tables should not be considered in isolation or as a substitute
for, nor superior to, financial results and measures determined or
calculated in accordance
with GAAP and may not be comparable to similarly-titled measures
used by other companies.
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to Adjusted EBITDA:
|
|
|
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
|
Full
Year
|
2024
|
|
|
|
|
|
|
|
|
|
Net income
|
$
16
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
6
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
20
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
28
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
10
|
|
|
|
|
|
|
|
|
Development advance
notes amortization
|
5
|
|
|
|
|
|
|
|
|
Transaction-related
(a)
|
41
|
|
|
|
|
|
|
|
|
Impairment
(b)
|
12
|
|
|
|
|
|
|
|
|
Restructuring costs
(c)
|
3
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
Net income
|
$
67
|
|
$
70
|
|
$
103
|
|
$
50
|
|
$
289
|
Provision for income
taxes
|
24
|
|
26
|
|
33
|
|
25
|
|
109
|
Depreciation and
amortization
|
19
|
|
19
|
|
19
|
|
20
|
|
76
|
Interest expense,
net
|
22
|
|
24
|
|
27
|
|
29
|
|
102
|
Early extinguishment of
debt (d)
|
—
|
|
3
|
|
—
|
|
—
|
|
3
|
Stock-based
compensation
|
9
|
|
9
|
|
10
|
|
11
|
|
39
|
Development advance
notes amortization
|
3
|
|
4
|
|
4
|
|
5
|
|
15
|
Transaction-related
(a)
|
—
|
|
4
|
|
1
|
|
5
|
|
11
|
Separation-related
(e)
|
2
|
|
(2)
|
|
—
|
|
—
|
|
1
|
Foreign currency impact
of highly inflationary countries (f)
|
1
|
|
1
|
|
3
|
|
9
|
|
14
|
Adjusted
EBITDA
|
$
147
|
|
$
158
|
|
$
200
|
|
$
154
|
|
$
659
|
|
|
|
|
|
|
|
|
|
|
NOTE: Amounts
may not add due to rounding.
|
(a) Represents costs related
to corporate transactions, including Choice Hotels' unsuccessful
hostile takeover attempt.
|
(b) Primarily represents an
impairment of development advance notes as a result of the
Company's evaluation of the recoverability of their carrying
value.
|
(c) Represents charges
associated with the Company's 2024 restructuring plan consisting
primarily of employee related costs.
|
(d) Relates to non-cash
charges associated with the Company's refinancing of its term loan
B.
|
(e) Represents costs
associated with the Company's spin-off from Wyndham Worldwide.
|
(f) Relates to the foreign
currency impact from hyper-inflation, primarily in Argentina, which
is reflected in operating expenses on the income statement.
|
Table 7
(continued)
|
WYNDHAM HOTELS &
RESORTS
|
NON-GAAP
RECONCILIATIONS
|
(In millions, except
per share data)
|
|
|
|
|
Reconciliation of
Net Income and Diluted EPS to Adjusted Net Income and Adjusted
Diluted EPS:
|
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
Diluted
EPS
|
$
0.19
|
|
$
0.77
|
|
|
|
|
Net
income
|
$
16
|
|
$
67
|
|
|
|
|
Adjustments:
|
|
|
|
Transaction-related
|
41
|
|
—
|
Impairment
|
12
|
|
—
|
Acquisition-related
amortization expense (a)
|
7
|
|
7
|
Restructuring
costs
|
3
|
|
—
|
Foreign currency
impact of highly inflationary countries
|
—
|
|
1
|
Separation-related
|
—
|
|
2
|
Total adjustments
before tax
|
63
|
|
10
|
Income tax provision
(b)
|
15
|
|
2
|
Total adjustments after
tax
|
48
|
|
8
|
Adjusted net
income
|
$
64
|
|
$
75
|
Adjustments - EPS
impact
|
0.59
|
|
0.09
|
Adjusted diluted
EPS
|
$
0.78
|
|
$
0.86
|
|
|
|
|
Diluted weighted
average shares outstanding
|
81.8
|
|
87.1
|
|
|
|
|
|
|
|
|
|
|
(a) Reflected in depreciation
and amortization on the income statement.
|
(b) Reflects the estimated
tax effects of the adjustments.
|
Table
8
|
WYNDHAM HOTELS &
RESORTS
|
2024
OUTLOOK
|
As of April 24,
2024
|
(In millions, except
per share data)
|
|
|
|
|
2024 Outlook
(a)
|
Fee-related and other
revenues
|
$
|
1,430 –
1,460
|
Adjusted
EBITDA
|
|
690 – 700
|
Depreciation and
amortization expense (b)
|
|
46 – 48
|
Development advance
notes amortization expense
|
|
23 – 25
|
Stock-based
compensation expense
|
|
43 – 45
|
Interest expense,
net
|
|
118 – 120
|
Adjusted income before
income taxes
|
|
454 – 468
|
Income tax expense
(c)
|
|
114 – 117
|
Adjusted net
income
|
$
|
341 – 351
|
|
|
|
Adjusted diluted
EPS
|
$
|
4.18 – 4.30
|
|
|
|
Diluted shares
(d)
|
|
81.6
|
|
|
|
Capital
expenditures
|
|
Approx. $40
|
Development advance
notes
|
|
Approx. $90
|
|
|
|
Adjusted free cash flow
conversion rate
|
|
~60%
|
|
|
|
Year-over-Year
Growth
|
|
|
Global
RevPAR
|
|
2% – 3%
|
Number of
rooms
|
|
3% – 4%
|
|
|
|
|
|
|
|
|
|
|
NOTE:
Outlook for adjusted EBITDA, adjusted net income, adjusted diluted
EPS and adjusted free cash flow conversion rate excludes all
expenses and cash outlays associated with unsuccessful hostile
takeover attempt by Choice Hotels.
|
(a) Year-over-year growth
rates for adjusted EBITDA, adjusted net income and adjusted diluted
EPS are not comparable due to full-year 2023 marketing fund
revenues exceeding expenses by $9 million (before taxes), which
substantially completed the recovery of the $49 million support the
Company provided to its owners during COVID.
|
(b) Excludes amortization of
acquisition-related intangible assets of approximately $27
million.
|
(c) Outlook assumes an
effective tax rate of approximately 25%.
|
(d) Excludes the impact of
any share repurchases after March 31, 2024.
|
In determining adjusted EBITDA, interest expense, net, adjusted
income before income taxes, adjusted net income, adjusted diluted
EPS and adjusted free cash flow conversion rate, we exclude certain
items which are otherwise included in determining the comparable
GAAP financial measures. We are providing these measures on a
non-GAAP basis only because, without unreasonable efforts, we are
unable to predict with reasonable certainty the occurrence or
amount of all the adjustments or other potential adjustments that
may arise in the future during the forward-looking period, which
can be dependent on future events that may not be reliably
predicted. Based on past reported results, where one or more of
these items have been applicable, such excluded items could be
material, individually or in the aggregate, to the reported
results.
Table 9
WYNDHAM HOTELS & RESORTS
DEFINITIONS
Adjusted Net Income and Adjusted Diluted EPS: Represents
net income and diluted earnings per share excluding
acquisition-related amortization, impairment charges, restructuring
and related charges, contract termination costs, separation-related
items, transaction-related items (acquisition-, disposition-, or
debt-related), (gain)/loss on asset sales and foreign currency
impacts of highly inflationary countries. The Company calculates
the income tax effect of the adjustments using an estimated
effective tax rate applicable to each adjustment.
Adjusted EBITDA: Represents net income excluding net
interest expense, depreciation and amortization, early
extinguishment of debt charges, impairment charges, restructuring
and related charges, contract termination costs, separation-related
items, transaction-related items (acquisition-, disposition-, or
debt-related), (gain)/loss on asset sales, foreign currency impacts
of highly inflationary countries, stock-based compensation expense,
income taxes and development advance notes amortization. Adjusted
EBITDA is a financial measure that is not recognized under U.S.
GAAP and should not be considered as an alternative to net income
or other measures of financial performance or liquidity derived in
accordance with U.S. GAAP. In addition, the Company's definition of
adjusted EBITDA may not be comparable to similarly titled measures
of other companies.
Average Daily Rate (ADR): Represents the average
rate charged for renting a lodging room for one day.
Average Occupancy Rate: Represents the percentage of
available rooms occupied during the period.
Comparable Basis: Represents a comparison eliminating the
year-over-year variability of the Company's marketing funds.
Constant Currency: Represents a comparison eliminating
the effects of foreign exchange rate fluctuations between periods
(foreign currency translation) and the impact caused by any foreign
exchange related activities (i.e., hedges, balance sheet
remeasurements and/or adjustments).
Free Cash Flow: Reflects net cash provided by operating
activities excluding development advances, less capital
expenditures. The Company believes free cash flow to be a useful
operating performance measure to it and investors. This measure
helps the Company and investors evaluate its ability to generate
cash beyond what is needed to fund capital expenditures, debt
service and other obligations. Notwithstanding cash on hand and
incremental borrowing capacity, free cash flow reflects the
Company's ability to grow its business through investments and
acquisitions, as well as its ability to return cash to shareholders
through dividends and share repurchases or even to delever. Free
cash flow is not a representation of how the Company will use
excess cash. A limitation of using free cash flow versus the GAAP
measure of net cash provided by operating activities as a means for
evaluating Wyndham Hotels is that free cash flow does not represent
the total cash movement for the period as detailed in the condensed
consolidated statement of cash flows.
Adjusted Free Cash Flow: Represents free cash flow
excluding payments for transaction-related, restructuring-related
and separation-related items.
Adjusted Free Cash Flow Conversion Rate: Represents the
percentage of adjusted EBITDA that is converted to adjusted free
cash flow and provides insights into how efficiently the Company is
able to turn profits into cash available for use, such as for
investments (including development advance
notes), debt reduction, dividends or share repurchases.
Net Debt Leverage Ratio: Calculated by dividing
total debt less cash and cash equivalents by trailing twelve months
adjusted EBITDA.
Number of Rooms: Represents the number of rooms at
the end of the period which are (i) either under franchise and/or
management agreements or Company-owned and (ii) properties under
affiliation agreements for which the Company receives a fee for
reservation and/or other services provided.
RevPAR: Represents revenue per available room and is
calculated by multiplying average occupancy rate by ADR.
Royalty Rate: Represents the average royalty rate earned
on the Company's franchised properties and is calculated by
dividing total royalties, excluding the impact of amortization of
development advance notes, by total room revenues.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/wyndham-hotels--resorts-reports-strong-first-quarter-results-302126601.html
SOURCE Wyndham Hotels & Resorts