<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
October 23, 1997
----------------------------------
Date of report (Date of earliest event reported)
SIGNATURE RESORTS, INC.
----------------------------------
(Exact Name of Registrant as Specified in its Charter)
Maryland 000-21193 95-4582157
(State or other Jurisdiction (Commission Title (IRS Employer
of Incorporation) Number) Identification Number)
1875 SOUTH GRANT STREET, SUITE 650
SAN MATEO, CALIFORNIA 94402
---------------------------------------
(Address of Principal Executive Offices)
(650) 312-7171
----------------------------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
On October 23, 1997, Signature Resorts, Inc. (the "Company") issued a
press release (the "Press Release") announcing its third quarter earnings. A
copy of the Press Release is attached as exhibit 99 hereto and is incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
Exhibit 99 - Text of Press Release issued by the Company dated
October 23, 1997.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
SIGNATURE RESORTS, INC.
By: /s/ Andrew D. Hutton
----------------------
Name: Andrew D. Hutton
Title: Vice President and General Counsel
Dated: October 24, 1997
<PAGE>
EXHIBIT INDEX
99 Text of Press Release issued by the Company dated October 23, 1997.
<PAGE>
EXHIBIT 99
SIGNATURE RESORTS, INC. REPORTS A 156% INCREASE
IN RECURRING EPS FOR THE THIRD QUARTER 1997
SAN MATEO, California, October 23, 1997 - Signature Resorts, Inc. (NASDAQ-
NNM:SIGR) today announced total revenues for the three months ended September
30, 1997 of $94,234,000, a 69% increase over the $55,847,000 pro forma total
revenues reported in the comparable period of 1996. Recurring net income for the
three months ended September 30, 1997 was $ 9,858,000, a 176% increase over the
$3,573,000 pro forma recurring net income reported in the comparable period of
1996. On a recurring per share basis, net income increased 156% to $0.41 for
the third quarter of 1997 from $0.16 pro forma net income for the third quarter
of 1996. EBITDA for the third quarter of 1997 increased 130% to $25,277,000 from
the pro forma EBITDA of $10,967,000 for the third quarter of 1996. Recurring
income from operations increased 195% to $20,740,000 in the third quarter of
1997 from $7,032,000 in the third quarter of 1996.
The Company's September 30, 1996 historical financial statements have been
restated to reflect the pooling-of-interests accounting treatment for the
Company's acquisition by merger of AVCOM International, Inc., Plantation Resorts
Group, Inc. and LSI Group Holdings, plc. The Company's September 30, 1996 pro
forma financial statements also reflect the Company's August 1996 initial public
offering and the concurrent consolidation of the Company's predecessor entities
as if they had occurred at the beginning of the period.
Interval sales at Signature's resorts during the third quarter of 1997
increased 71% to 5,134 intervals sold from 3,006 intervals sold during the third
quarter of 1996. Point sales at Signature's European resorts during the third
quarter of 1997 increased 35% to 50,160 points sold from 37,200 points sold in
the comparable period of 1996. The increase in intervals and points sold is, in
large part, the result of strong sales trends at the Company's resorts as well
as due to the Company recording sales for the first time at the Embassy Vacation
Resort at Lake Tahoe, Scottsdale Villa Mirage Resort and The Ridge at Sedona
Golf Resort, all either acquired or developed by the Company subsequent to the
third quarter of 1996. The average sales price of intervals sold at the
Company's resorts increased 1% to $13,576 during the third quarter of 1997 from
$13,443 during the comparable period of 1996. The average sales price will
change from period to period depending upon the mix of resorts in sales and the
type of units sold (studio, one, two and three bedrooms). The average price per
point sold at the Company's European resorts increased 18% to $204 during the
third quarter of 1997 from $173 during the third quarter of 1996.
Three Months Ended September 30, 1997
<TABLE>
<CAPTION>
1997 1996
Actual Pro Forma Increase
<S> <C> <C> <C>
Intervals sold 5,134 3,006 71%
Points sold 50,160 37,200 35%
Total revenues $94,234,000 $55,847,000 69%
Recurring net income $ 9,858,000 $ 3,573,000 176%
EBITDA $25,277,000 $10,967,000 130%
Recurring EPS $ 0.41 $ 0.16 156%
Weighted average shares 24,320,000 22,110,000 10%
</TABLE>
<PAGE>
The share amounts set forth in this announcement do not give effect to
Signature's announced 3 for 2 stock split dividend. Stockholders of record on
October 10, 1997 will receive one additional share of Signature Resorts common
stock for every two shares owned on the record date. The dividend shares will be
delivered on October 27, 1997. Fractional shares will be paid in cash.
Commenting on the results for the quarter, A. Jody Gessow, Signature's Co-
Chief Executive Officer and President observed that, "The third quarter was an
extraordinary period for our company. Not only did we set record highs in total
revenues, income from operations and recurring net income, we also completed our
$200 million Senior Subordinated Note offering, closed the acquisition of LSI
Group Holdings, plc and the Savoy Hotel in the South Beach district of Miami,
successfully negotiated the acquisitions of Vacation Internationale, Ltd., Marc
Hotels and Resorts, Inc. and the Embassy Suites Resort at Kaanapali Beach, Maui,
and introduced the "Sunterra Resorts" brand name for our formerly non-branded
resorts."
Mr. Gessow continued, "Adding Vacation Internationale's 21 resorts to our
existing resorts will offer our combined 140,000 member families 57 vacation
destinations in seven countries. Further, combining Vacation Internationale, the
first vacation ownership points club in North America, with LSI, the largest
points club in Europe, under our common ownership will give Signature a
commanding start in developing our company-wide Club Sunterra points based
system which we plan to introduce during the second half of 1998. We expect the
Vacation Internationale acquisition to close during the fourth quarter of 1997."
Reported net income in the third quarter of 1997 of $7,164,000 and reported
earnings per share of $0.30 differ from recurring net income and recurring
earnings per share by $2,694,000 and $0.11, respectively, reflecting one-time
charges of $4,077,000 ($2,446,000, net of income taxes) incurred during the
third quarter of 1997 for merger expenses related to the acquisition of LSI
Group Holdings, plc and $413,000 ($248,000, net of income taxes) incurred during
the third quarter of 1997 in connection with the early retirement of debt. Pro
forma net income in the third quarter of 1996 of $3,070,000 and reported
earnings per share of $0.14 differ from pro forma recurring net income and pro
forma recurring earnings per share of $3,573,000 and $0.16, respectively,
reflecting non-recurring charges of $839,000 ($503,000, net of income taxes)
incurred during the third quarter of 1996 due to the write down of certain AVCOM
International, Inc. resort properties to net realizable value.
Nine Month Recurring EPS Increases 70%
Total revenues for the nine months ended September 30, 1997 were
$249,285,000, a 63% increase over the $153,112,000 pro forma total revenues
reported during the first nine months of 1996. Recurring net income for the nine
month period ending September 30, 1997 increased 82% to $22,017,000 from the
$12,083,000 pro forma recurring net income in the comparable period of 1996. On
a recurring per share basis, net income increased 70% to $0.92 for the nine
months ended September 30, 1997 from $0.54 pro forma for the comparable period
in 1996. EBITDA for the nine months ended September 30, 1997 increased 79% to
$58,699,000 from pro forma EBITDA of $32,722,000 for the first nine months of
1996. Recurring income from operations increased 94% to $43,802,000 in the nine
months ended September 30, 1997 from $22,575,000 in the nine months ended
September 30, 1996.
Nine Months Ended September 30, 1997
<TABLE>
<CAPTION>
1997 1996
Actual Pro Forma Increase
<S> <C> <C> <C>
Intervals sold 13,605 8,336 63%
Points sold 130,750 90,715 44%
Total revenues $249,285,000 $153,112,000 63%
Recurring net income $ 22,017,000 $ 12,083,000 82%
EBITDA $ 58,699,000 $ 32,772,000 79%
Recurring EPS $ 0.92 $ 0.54 70%
</TABLE>
<PAGE>
Weighted average shares 24,047,000 22,239,000 8%
Pro forma net income for the nine months ended September 30, 1997 of
$15,267,000 and pro forma earnings per share of $0.64 differ from recurring net
income and recurring earnings per share by $6,750,000 and $0.28, respectively,
reflecting one-time charges of $9,973,000 (5,984,000, net of income taxes) for
merger expenses related to the acquisitions of LSI Group Holdings, plc,
Plantation Resort Group, Inc. and AVCOM International, Inc. each of which was
consummated during the nine month period and $1,276,000 ($766,000, net of income
taxes) incurred in connection with the early retirement of debt. Pro forma net
income for the nine months ended September 30, 1996 of $12,599,000 and pro forma
earnings per share of $0.57 differ from pro forma recurring net income and
recurring earnings per share of $12,083,000 and $0.54, respectively, reflecting
non-recurring revenue of $1,700,000 ($1,019,000, net of income taxes) received
in the second quarter of 1996 from the realization of a one-time gain related to
the collection of a note receivable obtained in connection with the Company's
purchase of the Flamingo Beach Club and a non-recurring charge of $839,000
($503,000, net of income taxes) incurred during the third quarter of 1996 due to
the write down of certain AVCOM International, Inc. resort properties to net
realizable value.
Subsequent to September 30, 1997, Signature completed its acquisition of
Hawaii-based Marc Hotels & Resorts, Inc. which manages 22 resorts, in exchange
for approximately 141,000 newly-issued shares of Signature common stock and
acquired the Bent Creek Resort in Gatlinburg, Tennessee. Upon the completion of
construction and renovation of existing units at Bent Creek, Signature intends
to begin the first phase of vacation ownership sales in the first half of 1998.
In addition, on October 21, 1997, Signature announced that its Board of
Directors has elected Adam Aron of Vail Resorts, Inc., J. Crandall of Keystone,
Inc., and Michael Depatie (Signature's Executive Vice President and Chief
Financial Officer) to fill three newly created Board of Directors seats.
Signature Resorts, Inc. is the world's largest owner and operator of
vacation ownership resorts. Upon completion of Signature's pending acquisitions
of Vacation Internationale, Ltd. and of the Embassy Suites Resort at Kaanapali
Beach, Maui, Hawaii, Signature's properties will consist of 57 resort locations
in seven countries. In addition, following its recent acquisition of Marc Hotels
& Resorts, Signature manages an additional 22 resorts in the Hawaiian Islands.
This release contains forward looking statements, which include Signature's
geographic and points-based club system expansion plans, Signature's future
prospects and other forecasts and statements of expectations. Actual results
might differ materially from those expressed in any forward looking statements
made by Signature, due among other things, to exchange rate related risks,
whether the Vacation Internationale and Kaanapali acquisitions close and such
acquisitions' impact on the Company's operations, the ability of the Company to
successfully implement a points-based club system, as well as those factors
identified in Part I of Signature's Annual Report on Form 10-K for the year
ended December 31, 1996.
CONTACT: Michael A. Depatie, Chief
Financial officer, or Dewey W. Chambers,
Treasurer - (650) 312-7171
PAGE 3
<PAGE>
Signature Resorts, Inc. and Subsidiaries
Consolidated Statements of Income
Three Months Ended
September 30, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
September 30,
----------------------------
1997 1996
----------- ------------
Actual Pro Forma(a)
----------- ------------
<S> <C> <C>
Revenues:
Vacation Interval sales $ 79,915 $ 47,083
Interest income 11,488 6,435
Other income 2,831 2,329
----------- -----------
Total revenue $ 94,234 $ 55,847
----------- -----------
Costs and operating expenses:
Vacation Intervals cost of sales 19,579 11,967
Advertising, sales and marketing 35,718 22,730
Loan Portfolio:
Interest expense-treasury 2,939 2,917
Other 1,145 999
Provision for doubtful accounts 2,278 1,316
General and administrative 10,231 7,627
Depreciation and amortization 1,604 1,259
Resort Property Valuation 839
Merger related expenses 4,077
----------- -----------
Total costs and operating expenses $ 77,571 $ 49,654
----------- -----------
Income from operations 16,663 6,193
Net interest expense- other 4,304 836
Minority interest in income of
consolidated limited partnership 111
Equity loss (gain) in joint venture 6 130
----------- -----------
Income before taxes and extraordinary item 12,353 5,116
Provision for income taxes 4,941 2,046
----------- -----------
Net income before extraordinary item 7,412 3,070
Extraordinary item, net of income taxes 248 -
----------- -----------
Net Income $ 7,164 $ 3,070
=========== ===========
EBITDA (b) $ 25,277 $ 10,967
=========== ===========
Earnings per share:
Income before extraordinary item $ 0.30 $ 0.14
Extraordinary item, net of income taxes $ (0.01) $ -
----------- -----------
Net Income $ 0.29 $ 0.14
=========== ===========
Weighted average common and common
equivalent shares outstanding 24,320,000 22,110,000
</TABLE>
(a) The 1996 pro forma statements of income reflects the consummation of the
AVCOM International Inc., Plantation Resorts Group, Inc. and LSI Group
Holdings, plc mergers by applying pooling-of-interest accounting treatment
to the historical statements of income as if the mergers had occurred at the
beginning of the periods presented. The pro forma statements of income also
gives effect to the consolidation of the company's predecessor corporations,
partnerships, and limited liability companies and the company's August 1996
initial public offering as if they had occurred at the beginning of the
periods presented. The pro forma adjustments are based upon currently
available information and certain assumptions that the company's management
believes are reasonable under current circumstances.
(b) EBITDA represents net income before interest expense, income taxes, non-
recurring costs and depreciation and amortization.
<PAGE>
Signature Resorts, Inc. and Subsidiaries
Consolidated Statements of Income
Nine Months Ended
September 30, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
September 30,
----------------------------
1997 1996
----------- ------------
Actual Pro Forma(a)
----------- ------------
<S> <C> <C>
Revenues:
Vacation Interval sales $ 210,261 $ 125,565
Interest income 29,529 18,543
Other income 9,495 9,004
----------- -----------
Total revenue $ 249,285 $ 153,112
----------- -----------
Costs and operating expenses:
Vacation Intervals cost of sales 54,317 33,170
Advertising, sales and marketing 94,757 59,115
Loan Portfolio:
Interest expense-treasury 10,877 7,629
Other 4,457 2,737
Provision for doubtful accounts 6,013 3,653
General and administrative 30,793 19,369
Depreciation and amortization 4,269 3,164
Resort Property Valuation 839
Merger related expenses 9,973
----------- -----------
Total costs and operating expenses $ 215,456 $ 129,676
----------- -----------
Income from operations 33,829 23,436
Net interest expense-other 7,160 1,841
Minority interest in income of
consolidated limited partnership 123 111
Equity loss (gain) in joint venture 126 485
----------- -----------
Income before taxes and extraordinary item 26,420 20,999
Provision for income taxes 10,387 8,400
----------- -----------
Net income before extraordinary item 16,033 12,599
Extraordinary item, net of income taxes 766 -
----------- -----------
Net Income $ 15,267 $ 12,599
=========== ===========
EBITDA (b) $ 58,699 $ 32,772
=========== ===========
Earnings per share:
Income before extraordinary item $ 0.67 $ 0.57
Extraordinary item, net of income taxes $ (0.03) $ -
----------- -----------
Net Income $ 0.64 $ 0.57
=========== ===========
Weighted average common and common
equivalent shares outstanding 24,047,000 22,239,000
</TABLE>
(a) The 1996 pro forma statements of income reflects the consummation of the
AVCOM International Inc., Plantation Resorts Group, Inc. and LSI Group
Holdings, plc mergers by applying pooling-of-interest accounting treatment
to the historical statements of income as if the mergers had occurred at the
beginning of the periods presented. The pro forma statements of income also
gives effect to the consolidation of the company's predecessor corporations,
partnerships, and limited liability companies and the company's August 1996
initial public offering as if they had occurred at the beginning of the
periods presented. The pro forma adjustments are based upon currently
available information and certain assumptions that the company's management
believes are reasonable under current circumstances.
(b) EBITDA represents net income before interest expense, income taxes, non-
recurring costs and depreciation and amortization.
