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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 8, 1999
Wyndham International, Inc.
(Exact name of registrant as specified in its charter)
Delaware 1-9320 94-2878485
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation or
organization)
1950 Stemmons Freeway, Suite 6001
Dallas, Texas 75207
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code:
(214) 863-1000
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Item 5. Other Events
On November 8, 1999, Wyndham International, Inc., a Delaware
corporation, issued a press release announcing its earnings for the quarter
ended September 30, 1999. A copy of the press release is attached hereto as
Exhibit 99.1 and hereby incorporated by this reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
The following Exhibits are filed herewith:
99.1 Press Release.
[SIGNATURE PAGE FOLLOWS]
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WYNDHAM INTERNATIONAL, INC.
By: /s/ RICHARD MAHONEY
-------------------------------------------
Richard Mahoney, Chief Financial Officer
Date: November 8, 1999
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EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
99.1* Press Release.
* filed herewith
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Exhibit 99.1
------------
MEDIA INQUIRIES: ANALYST INQUIRIES:
Fred Stern Paul Keung
V.P. of Corporate Communications V.P. of Finance/Investor Relations
(214) 863-1258 (214) 863-1265
WYNDHAM INTERNATIONAL REPORTS THIRD QUARTER RESULTS
Branded Hotel Performance Remains On Pace During Restructuring
Dallas, TX (November 8, 1999) -- Wyndham International, Inc. (NYSE:WYN)
today reported third quarter earnings and outlined plans for next year that
includes a greater focus on its Wyndham Hotels & Resorts brand.
Wyndham International reported that its loss in the third quarter narrowed
over the prior year. For the quarter, the company had a net loss of $44.6
million, or $0.41 per share (diluted) compared with a loss of $59.4 million or
$1.02 per shares (diluted) for the same period last year. Third quarter results
this year included $12.4 million in non-recurring charges primarily related to
the company's restructuring.
The company said although its third quarter was paced by a strong
performance of its core proprietary brands, performance of its non-proprietary
branded assets fell short of expectations. The company attributed the shortfall
to the conversion of assets related to the Interstate/Marriott transaction and
assets listed for sale. The company also announced financial projections for
2000.
"As we transform the company, we are experiencing short-term disruptions
mostly in our non-proprietary branded assets, which are impacting our operating
results to a far greater extent than anticipated," said James D. Carreker,
chairman and chief executive officer. "However, our focus is to grow long term
shareholder value by growing Wyndham Hotels & Resorts to first tier status. A
more focused business plan and greater scale is enhancing the performance of our
branded portfolio, as indicated by our third quarter results."
The growth of the brand will focus on flagship properties in major cities
and resort areas as well as greater distribution in suburban locations. The
suburban locations will include new construction and, in addition, the company
said it will invest capital and convert many of the high-rise, suburban Wyndham
Garden products into full-service Wyndham Hotels.
In outlining the company's financial projections, Carreker said: "We
recognize that we are operating in an economic cycle of moderating growth,
increased supply and more competition for occupancy and revenue. Nevertheless,
we are confident that our company is well positioned. For this year, we expect
to achieve EBITDA, as adjusted, in the range of $620 million to $625 million.
For the year 2000, we estimate EBITDA growth, as adjusted, of eight to 10
percent, with total comparable owned RevPAR growth of 2% to 3% and capital
expenditures of approximately $190 million."
Third Quarter Performance
In reporting third quarter earnings before interest, taxes, depreciation
and amortization including certain one-time non-recurring charges (EBITDA), the
company said prior year quarterly EBITDA, as adjusted, includes the results for
assets that have since been sold, including the Bay Meadows racetrack, 15 hotels
and the spin-off of the Interstate Hotels Corporation. EBITDA, as adjusted, from
comparable owned and leased hotels for the quarter was approximately equal to
that of the prior year. Actual EBITDA, as adjusted, was $126.0 million, compared
to $152.1 million for the third quarter 1998.
Performance of the company's proprietary-branded hotels was led by the
Wyndham Hotels & Resorts brand, in which comparable hotels realized RevPAR
growth of 6.5% in the third quarter over the same period a year ago. The
company's luxury resort collection, Grand Bay, grew RevPAR by 3.9%. RevPAR for
the Summerfield Suites division increased 1.2%.
The company's owned and leased hotels generated a 1.6% RevPAR increase in
the quarter. On a comparable basis, proprietary branded owned and leased hotels
had RevPAR growth of 3.7% for the quarter and 2.4% for the year, proprietary
branded EBITDA, as adjusted, increased 5.9% and 7.4%, respectively. These
results were led by the core Wyndham brand, which posted RevPAR growth of 4.7%
and EBITDA, as adjusted, growth of 10.6%. RevPAR for non-proprietary branded
owned hotels fell 0.2% for the quarter and increased 0.4% year to date, largely
reflecting the significant number of hotels in transition following the
Interstate spin-off and other asset dispositions. Non-proprietary branded hotels
experienced a decline in EBITDA, as adjusted, of 6.9% for the quarter and 2.7%
for the year.
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"Non-proprietary branded assets and assets in transition continued to
experience weakness in RevPAR and EBITDA, as adjusted, growth, largely
reflecting short-term disruptions and costs associated with converting some of
these properties to Wyndham hotels or to third party managers. Additionally,
approximately 60 non-proprietary branded hotels experienced changes in either
property level management or franchise, or have been listed for sale. These
disruptions are expected to be short-term," Carreker said. "These moves are
important to the maximization of long term earnings and shareholder value."
Frederick J. Kleisner, president and chief operating officer, said, "During
the third quarter, we continued to streamline and simplify the organization,
including combining our luxury and resort divisions into a single organization
to take advantage of the company's operating and national sales capabilities. We
also opened the Wyndham Boston--following new openings in Chicago and Atlanta
earlier in the year--and converted the Wyndham Casa Marina Resort & Beach Club
in Key West. In addition, a new Summerfield Suites Hotel opened at the Miami
Airport and a new Wyndham hotel opened in the Denver Tech center."
Nine Months Performance
For the nine months, Wyndham reported a net loss of $921.0 million, or
$6.19 per share, including $907.5 million of largely non-cash, non-recurring
charges in the second quarter related principally to the company's restructuring
and recapitalization. EBITDA, as adjusted for the nine months increased 16.3% to
$480.8 million from $413.3 million last year.
Rights Offering
The company said that it intends to commence its previously announced
rights offering shortly. The Delaware Chancery Court last week approved the
settlement of a consolidated class action lawsuit related to the $1 billion
equity investment and related restructuring of the company. The company intends
to request the Securities and Exchange Commission to declare the registration
statement effective later today. Holders of Class A common stock and holders of
certain outstanding limited partnership units as of the close of business on
September 30, 1999 will receive rights to purchase up to $300 million of the
company's series A convertible preferred stock.
About Wyndham International
Wyndham International, Inc. is one of the world's largest hospitality and
lodging companies. Through its proprietary brands and management services
division, the company offers primarily upscale and luxury hotel and resort
accommodations in the United States, Canada, the Caribbean, Mexico and Europe.
Headquartered in Dallas, Wyndham International owns, leases, manages and
franchises more than 300 hotels totaling more than 70,000 rooms. For more
information, visit www.wyndhamintl.com.
Cautionary Statement
This press release is not an offer to sell securities and is not a
solicitation of an offer to buy securities. The rights offering will be made
only by means of a prospectus filed with and declared effective by the
Securities and Exchange Commission.
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This press release contains certain forward-looking statements within the
meaning of Sections 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including projections about future operating
results. The Company's results could differ materially from those set forth in
the forward-looking statements. Certain factors that might cause a difference
include, but are not limited to, risks associated with the availability of
equity or debt financing at terms and conditions favorable to Wyndham; risks
associated with the course of litigation; Wyndham's ability to effect sales of
assets on favorable terms and conditions; Wyndham's ability to integrate
acquisitions into its operations and management; the Year 2000 issue; risks
associated with the hotel industry and real estate markets in general;
competition within the lodging industry; the impact of general economic
conditions; risks associated with debt financing; and other risks and
uncertainties set forth in the company's annual, quarterly and current reports
and proxy statements.
Tables to follow...
(1) EBITDA is defined as income before interest expense, income tax expense, and
depreciation and amortization. EBITDA, as adjusted, excluded non-recurring items
and gains and losses from sales of real estate and investments, as these do not
impact operating results on a recurring basis. Management considers EBITDA to be
one measure of cash flows from operations of the Company before debt service
that provides a relevant basis for comparison, and EBITDA is presented to assist
investors in analyzing the performance of the Company. This information should
not be considered as an alternative to any measure of performance as promulgated
under generally accepted accounting principles, nor should it be considered as
an indicator of the overall financial performance of the Company. The Company's
calculation of EBITDA may be different from the calculation used by other
companies, and therefore, comparability may be limited.
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<TABLE>
<CAPTION>
WYNDHAM INTERNATIONAL, INC.
COMBINED CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
(UNAUDITED)
Quarter Ended Nine Months Ended
September 30, September 30,
--------------------------------- ---------------------------------
---------------- ---------------- ---------------- ----------------
1999 1998 1999 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Revenues:
Hotel revenues $ 562,720 $ 554,331 $ 1,829,882 $ 1,266,985
Participating lease revenues 341 8,932 929 49,627
Management fees and service fee income 13,968 24,358 58,655 61,574
Racecourse and land lease revenues - 9,955 4,561 34,945
Interest and other income 2,252 6,274 8,951 12,949
---------------- ---------------- ---------------- ----------------
Total revenues 579,281 603,850 1,902,978 1,426,080
---------------- ---------------- ---------------- ----------------
Expenses:
Hotel expenses 429,370 417,814 1,322,630 924,471
Racing facility operations - 8,810 3,867 29,667
General & administrative costs 22,648 26,571 97,478 64,558
Interest expense 85,478 82,739 266,678 172,191
---------------- ---------------- ---------------- ----------------
Total operating costs and expenses 537,496 535,934 1,690,653 1,190,887
---------------- ---------------- ---------------- ----------------
Excess revenues over direct expenses 41,785 67,916 212,325 235,193
Non-recurring charges
Restructuring expenses & strategic reorganization costs (6,929) - (220,906) -
Interstate spin-off costs (1,391) - (5,095) -
Treasury lock settlement - (49,225) - (49,225)
Abandoned transaction costs (189) - (5,228) -
Y2K costs and pre-opening expenses (2,028) - (5,703) -
Costs of acquiring license agreements - (3,940) (803) (61,000)
Non-recurring professional fees and other (2,959) - (2,959) -
Gain/(loss) on sale of assets 1,104 - (4,223) -
---------------- ---------------- ---------------- ----------------
Total non-recurring charges (12,392) (53,165) (244,917) (110,225)
Depreciation and amortization (75,653) (68,236) (232,558) (155,165)
Equity in earnings from unconsolidated subsidiaries (931) 1,888 3,000 7,375
Minority interest in Operating Partnerships - 4,722 6,642 6,169
Minority interest in other consolidated subsidiaries (760) (4,500) (4,824) (7,514)
---------------- ---------------- ---------------- ----------------
Loss before income taxes and extraordinary item (47,951) (51,375) (260,332) (24,167)
Provision for income taxes (3,386) 6,783 651,053 11,273
---------------- ---------------- ---------------- ----------------
Loss before extraordinary item (44,565) (58,158) (911,385) (35,440)
Extraordinary item net of minority interest - (1,257) (9,838) (31,817)
================ ================ ================ ================
Net loss $ (44,565) $ (59,415) $ (921,223) $ (67,257)
================ ================ ================ ================
Per Share Calculations:
Net loss $ (44,565) $ (59,415) $ (921,223) $ (67,257)
Adjustment for equity forwards - (95,063) (39,322) (122,431)
Adjustment for preferred stock (24,375) (2,695) (25,276) (4,250)
---------------- ---------------- ---------------- ----------------
Diluted net loss $ (68,940) $ (157,173) $ (985,821) $ (193,938)
Net loss per share
Basic ($0.41) ($0.40) ($6.06) ($0.54)
Diluted ($0.41) ($1.02) ($6.19) ($1.46)
Basic and diluted weighted average common shares 166,954 154,510 159,254 132,450
EBITDA as adjusted 126,011 152,111 480,828 413,320
================ ================ ================ ================
</TABLE>
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<TABLE>
<CAPTION>
WYNDHAM INTERNATIONAL, INC.
EBITDA RECONCILIATION AND SUMMARY OF RESTRUCTURING/STRATEGIC REORGANIZATION COSTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Quarter Ended Nine Months Ended
September 30, September 30,
--------------------------------- ---------------------------------
---------------- ---------------- ---------------- ----------------
1999 1998 1999 1998
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
EBITDA RECONCILIATION
Net Loss $ (44,565) $ (59,415) $ (921,223) $ (67,257)
Extraordinary item net of minority interest - 1,257 9,838 31,817
Interest expense 85,478 82,739 266,678 172,191
Depreciation and amortization 75,653 68,236 232,558 155,165
Provision for income taxes (3,386) 6,783 651,053 11,273
Minority interest in the Operating Partnerships - (4,722) (6,642) (6,169)
---------------- ---------------- ---------------- ----------------
EBITDA 113,180 94,878 232,262 297,020
Interest, depreciation & amortization from equity
interest in unconsolidated subsidiaries 3,298 4,501 9,496 5,047
Interest, depreciation & amortization attributable
to minority interests (3,681) (2,165) (8,983) (3,907)
Restructuring expenses & strategic reorganization costs 6,929 - 220,906 -
Interstate spin-off costs 1,391 - 5,095 -
Abandoned transaction costs 189 - 5,228 -
Y2K costs and pre-opening expenses 2,028 - 5,703 -
Amortization of unearned compensation 822 1,732 3,136 4,935
Costs of acquiring leaseholds - 3,940 803 61,000
Treasury Lock Settlement - 49,225 - 49,225
Non-recurring professional fees and other 2,959 - 2,959 -
Loss on sale of assets (1,104) - 4,223 -
---------------- ---------------- ---------------- ----------------
EBITDA as adjusted $ 126,011 $ 152,111 $ 480,828 $ 413,320
================ ================ ================ ================
SUMMARY OF RESTRUCTURING EXPENSE AND STRATEGIC REORGANIZATION COSTS
Write-off of goodwill associated with paired
share structure - $ - $ 83,094 $ -
Severance related costs and office closings 3,811 - 27,399 -
Fees related to the forward equity transactions - - 4,681 -
Professional and other fees related to strategic
alternative 2,458 - 14,510 -
Non-core asset write-downs 660 - 91,222 -
---------------- ---------------- ---------------- ----------------
Total restructuring/strategic reorganization
costs $ 6,929 $ - $ 220,906 $ -
================ ================ ================ ================
</TABLE>
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WYNDHAM INTERNATIONAL, INC.
THIRD QUARTER AND NINE MONTHS YEAR-TO-DATE OPERATING STATISTICS
<TABLE>
<CAPTION>
THIRD QUARTER 1999 NINE MONTHS ENDED SEPTEMBER 30
------------------ ------------------------------
1999 1998 % CHANGE 1999 1998 % CHANGE
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
BRANDED HOTEL PERFORMANCE
WYNDHAM HOTELS & RESORTS
Average daily rate $113.11 $109.68 3.1% $134.49 $128.20 4.9%
Occupancy 69.8% 67.6% 2.2 PPT 72.0% 67.6% 4.4 PPT
RevPAR $78.90 $74.08 6.5% $96.83 $90.37 7.1%
EBITDA Growth -- -- 19.5% -- -- 28.6%
WYNDHAM GARDEN HOTELS
Average daily rate $89.80 $90.79 -1.1% $94.19 $92.74 1.6%
Occupancy 74.0% 74.0% 0.0 PPT 71.0% 73.3% -2.3 PPT
RevPAR $66.42 $67.19 -1.1% $66.90 $68.00 -1.6%
GRAND BAY
Average daily rate $232.88 $232.99 0.0% $279.76 $281.87 -0.7%
Occupancy 67.2% 64.7% 2.5 PPT 71.3% 69.8% 1.5 PPT
RevPAR $156.42 $150.62 3.9% $199.36 $196.75 1.3%
SUMMERFIELD SUITES
Average daily rate $127.45 $121.15 5.2% $122.35 $120.36 1.7%
Occupancy 82.9% 86.2% -3.3 PPT 82.1% 83.8% -1.7 PPT
RevPAR $105.61 $104.40 1.2% $100.43 $100.82 -0.4%
COMPARABLE OWNED & LEASED HOTELS
TOTAL WYNDHAM BRAND
Average daily rate $107.74 $105.88 1.8% $122.38 $117.63 4.0%
Occupancy 71.8% 69.8% 2.0 PPT 72.1% 72.7% -0.6 PPT
RevPAR $77.36 $73.90 4.7% $88.28 $85.61 3.1%
EBITDA Growth -- -- 10.6% -- -- 17.9%
PROPRIETARY BRANDED (a)
Average daily rate $115.79 $113.33 2.2% $129.27 $124.95 3.5%
Occupancy 73.6% 72.8% 0.8 PPT 74.3% 74.8% -0.5 PPT
RevPAR $85.18 $82.14 3.7% $96.06 $93.77 2.4%
EBITDA Growth -- -- 5.9% -- -- 7.4%
NON-PROPRIETARY BRANDED
Average daily rate $101.83 $101.96 -0.1% $103.48 $102.18 1.3%
Occupancy 72.3% 72.3% 0.0 PPT 71.7% 72.2% -0.5 PPT
RevPAR $73.61 $73.73 -0.2% $74.20 $73.92 0.4%
EBITDA Growth -- -- -1.9% -- -- -2.7%
TOTAL PORTFOLIO
Average daily rate $107.51 $106.44 1.0% $113.16 $110.59 2.3%
Occupancy 72.6% 72.3% 0.3 PPT 72.3% 72.8% -0.5 PPT
RevPAR $78.09 $76.84 1.6% $81.78 $80.70 1.3%
EBITDA Growth -- -- 0.0% -- -- 1.7%
SELECTED PORTFOLIOS
HOTELS IN TRANSITION (b)
Average daily rate $114.60 $113.89 0.6% $118.07 $117.00 0.9%
Occupancy 72.8% 77.4% -4.6 PPT 74.7% 76.8% -2.1 PPT
RevPAR $83.46 $88.13 -5.3% $88.15 $89.82 -1.9%
OWNED HOTELS LISTED FOR SALE
Average daily rate $92.93 $91.56 1.5% $91.71 $90.15 1.7%
Occupancy 69.0% 70.3% -1.3 PPT 68.3% 70.0% -1.7 PPT
RevPAR $64.09 $64.41 -0.5% $62.61 $63.09 -0.8%
Note: Brand statistics are based on all comparable hotels operated by the Company for both quarters. Comparable owned
and leased statistics represents hotels owned or leased by the Company for at least one year.
(a) Includes comparable Wyndham Hotel & Resort, Wyndham Garden, Summerfield and Grand Bay properties.
(b) Includes twelve hotels that were transferred to Marriott International
management and nine hotels to Interstate Hotels as a result of the
Interstate spin-off and the Marriott Settlement agreement. Also includes
nine hotels converted to Wyndham over the last 90 days.
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