DALLAS, August 1, 2000 (PRIMEZONE) -- Silverleaf Resorts, Inc. (NYSE:SVR) today reported financial results for the second quarter ended June 30, 2000.
Second Quarter Results
Total revenue for the second quarter increased 26.5% to $71.3 million from $56.4 million in the second quarter of 1999. Demand for the Company's product continued to grow as vacation interval sales increased 27.4% to $59.2 million for the quarter ended June 30, 2000, from $46.4 million in the comparative prior year period. Interest income for the quarter increased 38.4% to $9.4 million, compared to $6.8 million in the year-ago period. Upgrade sales accounted for approximately 34.7% of total vacation interval sales, a 70.5% increase in dollar volume compared with last year's second quarter.
For the quarter ended June 30, 2000, net income was $4.0 million, or $0.31 per share, compared to $5.5 million, or $0.42 per share, in the second quarter of 1999, but it is an increase from $1.9 million, or $0.15 per share, in the first quarter of 2000. The improvement in net income from the first quarter is primarily the result of improved marketing efficiencies during the second quarter. Results for the 2000 second quarter include an extraordinary gain on the extinguishment of debt in the amount of $316,000, net of taxes, or $0.02 per diluted share. Total shareholders' equity at June 30, 2000 was $167.0 million and book value was $12.96 per diluted share.
"During the quarter, we began to see the initial results of our efforts to improve our marketing efficiencies and call center productivity," said Robert Mead, Chairman and Chief Executive Officer. "These initial results are reflected in earnings for the quarter that exceeded analyst estimates. We look forward to further improvements in our marketing efficiencies. In connection therewith in the third quarter we have retained a database management firm to assist us in improving the efficiency of our telemarketing centers. The result is that Silverleaf now has a more experienced team utilizing a more reliable database to target the right people more consistently."
"At the same time, the Company continues to achieve strong revenue growth. The high level of demand for Silverleaf vacations is perhaps most evident at our Fox River resort, which serves the greater Chicago area, a market we entered just two and a half years ago. Since then, this resort has become a major sales leader for the Company, with over $70.0 million in sales since it opened. Our success at Fox River and our continued expansion at Holiday Hills in Branson demonstrate that the Silverleaf model works well beyond our core market in Texas and sets the standard for all our branding efforts nationwide," Mead concluded.
For the six months ended June 30, 2000, total revenues increased 29.1% to $136.2 million compared to $105.5 million in the comparative prior year period. Vacation interval sales for the six months ended June 30, 2000 were $113.0 million, representing an increase of 28.8% compared to $87.8 million for the six months ended June 30, 1999. Net income decreased to $5.8 million, or $0.45 per diluted share, compared to $10.3 million, or $.80 per diluted share in the year-ago period. As anticipated, the decrease in net income is due to marketing efficiencies not yet in line with the Company's expectations compared to 1999. Results for the 2000 second quarter include an extraordinary gain on the extinguishment of debt in the amount of $316,000,net of taxes, or $0.02 per diluted share.
Resort Update
Fox River Resort. The Company completed the construction of Section 2 at its Fox River Resort, outside Chicago, IL. Driven by dramatic sales of more than $70 million in just two years, Silverleaf's Fox River Resort has already completed its first two sections totaling 174 Lodge Getaway units and plans to begin construction on the next two sections, which will include the upscale Presidential units.
Seaside Resort. In response to stronger-than-expected demand for units, the Company accelerated construction at the Seaside Resort in Galveston, TX. Sales at the property began in January, and the resort officially opened in April.
Holiday Hills Resort. The Company has obtained final approval and plans to develop 372 additional timeshare units and member amenities at Holiday Hills Resort in Branson, MO. The expansion will more than double capacity at the resort, which currently features 212 units. Construction of another 60 units is scheduled to be completed by the end of 2000.
Based in Dallas, Texas, Silverleaf Resorts, Inc. currently owns and/or operates 22 resorts in various stages of development. Silverleaf resorts offer a wide array of country club-like amenities, such as golf, swimming, horseback riding, boating, and many organized activities for children and adults. Silverleaf has a managed ownership base of over 109,000. Further information on the Company may be found on its website, www.silverleafresorts.com.
This release contains certain forward-looking statements which involve risks and uncertainties and actual results may differ materially from those anticipated. The Company is subject to specific risks associated with the timeshare industry, the regulatory environment, and various economic factors. Additionally, anticipated results are dependent upon the Company's ability to identify and acquire or develop other operations under terms which are beneficial to the Company and its shareholders. Other risk factors are more fully discussed under "Cautionary Statements" in the Company's SEC reports, including the Company's 1999 annual report on Form 10K (pages 29 through 35).
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------- ----------------
2000 1999 2000 1999
---- ---- ---- ----
Revenues:
Vacation Interval
sales $ 59,159 $ 46,447 $ 113,045 $ 87,775
Sampler sales 984 1,327 2,281 2,027
----------- ----------- ----------- -----------
Total sales 60,143 47,774 115,326 89,802
Interest income 9,367 6,761 18,136 12,427
Interest income
from affiliates 8 12 17 24
Management fee
income 466 640 547 1,540
Other income 1,335 1,186 2,200 1,660
----------- ----------- ----------- -----------
Total revenues 71,319 56,373 136,226 105,453
Costs and Operating
Expenses:
Cost of Vacation
Interval
sales 10,618 7,587 20,060 13,357
Sales and marketing 31,597 24,143 62,124 44,828
Provision for
uncollectible notes 5,916 4,645 11,304 8,777
Operating, general
and administra-
tive 6,767 5,180 14,074 10,548
Other expense 953 833 1,888 1,586
Depreciation and
amortization 1,854 1,335 3,635 2,540
Interest expense 7,690 3,745 14,168 7,027
----------- ----------- ----------- -----------
Total costs and
operating
expenses 65,395 47,468 127,253 88,663
Income before
provision for
income taxes and
extraordinary
item 5,924 8,905 8,973 16,790
Provision for
income taxes (2,281) (3,428) (3,455) (6,464)
----------- ----------- ----------- -----------
Income before
extraordinary
item $ 3,643 $ 5,477 $ 5,518 $ 10,326
Extraordinary gain
on extinguishment
of debt (net of
income tax of $197) 316 -- 316 --
----------- ----------- ----------- -----------
Net income $ 3,959 $ 5,477 $ 5,834 $ 10,326
=========== =========== =========== ===========
Basic and diluted
earnings per share:
Income before
extraordinary
item $ 0.29 $ 0.42 $ 0.43 $ 0.80
Extraordinary
item 0.02 -- 0.02 --
----------- ----------- ----------- -----------
Net income $ 0.31 $ 0.42 $ 0.45 $ 0.80
=========== =========== =========== ===========
Weighted average
basic and
diluted shares
outstanding: 12,889,417 12,889,417 12,889,417 12,889,417
=========== =========== =========== ===========
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(Unaudited)
June 30, December 31,
2000 1999
--------- ---------
ASSETS
Cash and cash equivalents $ 4,243 $ 4,814
Restricted cash 978 903
Notes receivable, net of
allowance for uncollectible
notes of $39,242 and $32,326,
respectively 352,905 286,581
Amounts due from affiliates 8,694 6,596
Inventories 121,304 112,810
Land, equipment, buildings,
and utilities, net 50,982 51,050
Prepaid and other assets 18,726 17,203
--------- ---------
TOTAL ASSETS $ 557,832 $ 479,957
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 16,560 $ 15,539
Unearned revenues 8,427 5,601
Income taxes payable -- 185
Deferred income taxes, net 29,299 28,251
Notes payable and capital
lease obligations 262,502 194,171
Senior subordinated notes 74,000 75,000
--------- ---------
Total Liabilities 390,788 318,747
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, par value
$0.01 per share, 100,000,000 shares
authorized, 13,311,517 shares issued,
and 12,889,417 shares outstanding 133 133
--------- ---------
Additional paid-in capital 109,339 109,339
Retained earnings 62,571 56,737
Treasury stock, at cost
(422,100 shares) (4,999) (4,999)
--------- ---------
Total Shareholders' Equity 167,044 161,210
--------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 557,832 $ 479,957
========= =========
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED SELECTED FINANCIAL DATA
(in thousands, except average price data)
(Unaudited)
As of and for the Quarters Ended
-------------------------------
6/30/00 3/31/00 12/31/99
------- ------- --------
FINANCIAL DATA
Earnings Before Interest expense,
Provision for Income Taxes, and
Depreciation and Amortization
expense
("EBITDA") $ 15,469 $ 11,308 $ 12,555
Gross notes receivable $392,147 $352,254 $318,907
Allowance for uncollectible notes $ 39,242 $ 35,942 $ 32,326
Delinquency percentage (overall)
(90 day basis) 10.9% 11.9% 10.4%
OPERATING DATA:
Number of Vacation Intervals sold
(excluding upgrades) 3,931 3,816 3,971
Number of upgraded
Vacation Intervals sold 4,211 3,495 3,238
Average price of Vacation Intervals
sold (excluding upgrades) $ 9,822 $ 9,828 $ 9,541
Average price of upgraded
Vacation Intervals sold $ 4,879 $ 4,688 $ 4,583
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED SELECTED FINANCIAL DATA
(in thousands, except average price data)
(Unaudited)
As of and for the Quarters Ended
--------------------------------
9/30/99 6/30/99
------- -------
FINANCIAL DATA:
Earnings Before Interest expense,
Provision for Income Taxes, and
Depreciation and Amortization
expense
("EBITDA") $ 14,780 $ 13,985
Gross notes receivable $287,517 $254,766
Allowance for uncollectible notes $ 29,018 $ 26,343
Delinquency percentage (overall)
(90 day basis) 9.3% 9.1%
OPERATING DATA:
Number of Vacation Intervals sold
(excluding upgrades) 3,948 4,031
Number of upgraded
Vacation Intervals sold 3,152 2,762
Average price of Vacation Intervals
sold (excluding upgrades) $ 9,357 $ 8,532
Average price of upgraded
Vacation Intervals sold $ 4,367 $ 4,364