| |
|
NASHVILLE, Tenn.--(BUSINESS WIRE)--Feb. 15, 2002--Gaylord Entertainment Company (NYSE:GET) today reported its financial results for the fourth quarter and year-end of 2001.
Commenting on the fourth quarter, Colin Reed, chief executive officer of Gaylord Entertainment said, We were able to report a solid quarter despite continued weakness in the overall hospitality sector. During this period, Gaylord benefited from the strength of our brands, industry leadership in the convention hotel business and strong performance from our Nashville attractions including the Grand Ole Opry. We believe we will see even better results in future quarters as the economy recovers, the travel environment improves and strategies we have put in place aimed at generating revenues and building our franchises take effect.
As a result of the Company's previously announced corporate reorganization, the Company also announced the following reclassification of its operating segments--hospitality, attractions, media, and corporate and other. The hospitality segment comprises the operations of Gaylord Hotels properties and the Radisson Opryland. The attractions segment represents all of the Nashville-area attractions, including the Grand Ole Opry, General Jackson showboat, Ryman Auditorium, Springhouse Golf Course and the Wildhorse Saloon. It also includes the results of Corporate Magic, the Company's corporate meeting and entertainment production business. The media segment includes Acuff-Rose music publishing and the Company's three radio stations. The corporate and other segment includes corporate expenses and results from investments in sports franchises and minority investments. All periods presented have been conformed to the new reporting format.
In the third quarter of 2001, the Company adopted a new accounting standard relating to the impairment or disposal of long-lived assets. Due to the adoption of this new standard, the results of operations of the following businesses, including any gain or loss on disposal, have been reflected as discontinued operations, net of taxes, in the consolidated financial results: Word Entertainment, Pandora Films, Gaylord Films, Gaylord Sports Management, Gaylord Event Television, Gaylord Production Company, GET Management, Opryland River Taxis, and the Company's cable networks operations. The assets and liabilities of these businesses are reflected as discontinued operations in the condensed consolidated balance sheets.
Fourth Quarter Operating Results
Revenues from continuing operations for the fourth quarter of 2001 were $88.3 million, an increase of 1.1% from $87.3 million in the fourth quarter of 2000. Excluding results from certain other businesses that were sold or closed in 2000 that were not reclassified to discontinued operations (Wildhorse Saloon-Orlando and KOA Kampground in the attractions segment and Gaylord Digital and country record label development in the media segment), revenues for the fourth quarter 2000 would have been $86.1 million. Revenues for the hospitality segment were $64.6 million as compared to $65.1 million in the fourth quarter of 2000. Attractions revenues were $17.6 million for the fourth quarter of 2001 as compared to $15.5 million in the same period 2000. Media segment revenues were $5.9 million, down from the $6.5 million in revenues posted in the year earlier period.
EBITDA (operating income plus depreciation, amortization, impairment and restructuring charges) from continuing operations, excluding hotel pre-opening costs, was $11.6 million in the fourth quarter of 2001, compared with EBITDA of $12.1 million in the fourth quarter of 2000. Excluding losses produced by the other businesses closed or sold in 2000, EBITDA, excluding pre-opening costs, would have been $17.1 million in the fourth quarter 2000. EBITDA from the hospitality segment, excluding hotel pre-opening expenses, decreased to $16.5 million in the fourth quarter of 2001 from $23.4 million in the fourth quarter of 2000. Hotel pre-opening expenses were $7.7 million for the fourth quarter of 2001 and $1.2 million for the fourth quarter of 2000. EBITDA of the attractions segment increased to $1.3 million in the fourth quarter of 2001 from EBITDA of $0.3 million in the fourth quarter of 2000. Excluding losses produced by businesses closed or sold in 2000, EBITDA for the attractions segment in the fourth quarter of 2000 would have been $0.5 million. In the media segment, EBITDA was $0.4 million in the fourth quarter of 2001 up from an EBITDA loss of $3.7 million in the fourth quarter of 2000. Excluding losses produced by businesses closed or sold in 2000, EBITDA for the media segment in the fourth quarter of 2000 would have been $1.2 million.
Operating losses from continuing operations were $13.7 million in the fourth quarter of 2001 compared to operating losses of $97.0 million in the fourth quarter of 2000. The operating income of the hospitality segment, excluding hotel pre-opening expenses, was $10.0 million in the fourth quarter of 2001 as compared to $17.0 million in the fourth quarter of 2000. The attractions segment had operating losses of $0.2 million in the fourth quarter of 2001 as compared to operating losses of $1.4 million in the fourth quarter of 2000. Operating losses in the media segment were $0.2 million for the fourth quarter of 2001, as compared to operating losses of $6.6 million for the fourth quarter of 2000.
During the fourth quarter of 2001 the Company recorded pretax income of $106.2 million reflecting the increase in the fair market value of the Company's investment in Viacom Class B common stock. This income was offset by a decline in the values of certain call and put options associated with the secured forward exchange contract used to monetize the Viacom stock whose fair market value declined by a combined $86.9 million in the fourth quarter of 2001. The Company also recorded approximately $6.8 million in non-cash interest expense in the fourth quarter of 2001 due to the amortization of deferred financing costs related to this transaction.
Losses before discontinued operations and the cumulative effect of an accounting change were $0.07 per diluted share in the fourth quarter 2001 as compared to a loss of $2.21 in the fourth quarter 2000. Net loss per diluted share was $0.69 in the fourth quarter 2001, compared with a net loss of $3.14 per diluted share in the fourth quarter 2000.
Net loss per diluted share in the fourth quarter of 2001 includes a noncash gain of $2.39 per share related to the increase in fair value of the Company's Viacom stock investment, a noncash loss per share of $1.96 related to the decrease in fair value of the call and put options associated with the secured forward exchange contract, noncash interest expense related to the secured forward exchange contract of $0.15 per share, a loss from discontinued operations of $0.62 per share, and nonrecurring impairment and restructuring charges of $0.17 per share.
Net loss per diluted share in the fourth quarter of 2000 includes noncash interest expense related to the secured forward exchange contract of $0.13 per share, a loss from discontinued operations of $0.94 per share, and nonrecurring impairment and restructuring charges of $1.93 per share.
During the fourth quarter of 2001, the Company recorded restructuring charges of $4.5 million in continuing operations related to the previously announced elimination of certain corporate overhead. The Company also recorded an impairment charge of $2.9 million in continuing operations in the fourth quarter of 2001 to reduce carrying values of certain assets to reflect management's estimates of fair value.
Year End Operating Results
2001 was a year of transition, challenge and opportunity for Gaylord Entertainment. During this year the Company experienced a management change, reorganization of the company and the sale of a number of non-core businesses. We experienced, after the tragic events of September 11, the most difficult operating environment the lodging market has seen in many years. We also re-branded our industry-leading resort convention hotel business Gaylord Hotels and began, in earnest, the revitalization and expansion of the Grand Ole Opry brand, said Mr. Reed. As we look forward to 2002, we will continue to explore opportunities to enhance our core hospitality and entertainment businesses and expand on our early success.
Revenues from continuing operations for the full year 2001 were $325.2 million, a decrease of $10.3 million from the $335.5 million recorded in full year 2000. Excluding results from businesses that were sold or closed in 2000, revenues for the full year 2000 would have been $326.2 million. Revenues for the hospitality segment were $228.7 million in the full year 2001, as compared to $237.3 million for the full year 2000. Attractions revenues were $65.9 million for the full year 2001 as compared to $63.2 million in 2000. Media segment revenues were $24.2 million, down 16.7% from the $29.0 million posted in the full year 2000 results.
EBITDA (operating income plus depreciation, amortization, impairment and restructuring charges) from continuing operations, excluding hotel pre-opening costs, was $35.1 million for 2001 compared with EBITDA of $20.4 million for 2000. Excluding losses produced by businesses closed or sold in 2000 and hotel pre-opening costs, EBITDA would have been $47.6 million for the full year 2000. The hospitality segment EBITDA, excluding hotel pre-opening expenses, decreased to $59.5 million in 2001 from $75.4 million in 2000. Hotel pre-opening expenses were $15.1 million for 2001 and $5.3 million for 2000. EBITDA of the attractions segment increased to $3.4 million in 2001 from negative EBITDA of $1.6 million in 2000. Excluding losses produced by businesses closed or sold in 2000, EBITDA for the attractions segment would have been a negative $0.9 million. In the media segment, EBITDA was $4.2 million for the full year 2001, compared to negative EBITDA of $21.9 million in 2000. Excluding losses produced by businesses closed or sold in 2000, EBITDA for the media segment would have been $4.6 million for the full year 2000.
Operating losses were $37.8 million in 2001 compared to operating losses of $127.2 million in full year 2000. The operating income of the hospitality segment, excluding hotel pre-opening expenses, decreased to $33.9 million in the full year 2001 as compared to $51.0 million in 2000. The operating losses in the attractions segment decreased by $5.7 million to operating losses of $2.4 million in 2001 as compared to operating losses of $8.0 million in the full year 2000 results. Operating income in the media segment was $1.7 million, compared to an operating loss in 2000 of $31.5 million.
Losses before discontinued operations and the cumulative effect of an accounting change were $0.22 per diluted share in 2001 as compared to losses per diluted share of $3.14 in 2000. Net loss per diluted share was $1.42 in 2001, compared with a net loss of $4.60 per diluted share in 2000.
Net loss per diluted share in the twelve months ended December 31, 2001 includes a noncash gain of $0.02 per share related to the increase in fair value of the Company's Viacom stock investment, a noncash gain per share of $1.13 related to the increase in fair value of the call and put options associated with the secured forward exchange contract, noncash interest expense related to the secured forward exchange contract of $0.56 per share, a gain from the cumulative effect of an accounting change of $0.35 per share, a loss from discontinued operations of $1.56 per share, and nonrecurring impairment and restructuring charges of $0.34 per share.
Net loss per diluted share in the twelve months ended December 31, 2000 includes noncash interest expense related to the secured forward exchange contract of $0.37 per share, a loss from discontinued operations of $1.46 per share and nonrecurring impairment and restructuring charges of $1.92 per share.
During 2001 and 2000, the Company recorded restructuring charges in continuing operations of $2.2 million and $13.1 million, respectively. The Company also recorded impairment and other charges of $14.3 million in 2001 and $81.6 million in 2000 to reduce carrying values of certain assets to reflect management's estimates of fair value.
Hospitality
Gaylord's hospitality division recovered well from the tragic events of September 11. RevPAR was down 20% in October, 4% in November and up slightly in December. Overall for the quarter RevPAR was down just 9%. The hospitality division is principally driven by the performance of the Gaylord Opryland Resort and Convention Center in Nashville, TN. On the performance of the hospitality segment, Mr. Reed said, We are pleased with the RevPAR performance of the Gaylord Opryland in the fourth quarter of 2001. With the exception of cancellations related to September 11 for room nights in October, our properties performed very well in a particularly challenging environment. Our group business remained strong through the quarter and our Country Christmas promotion had one of its most successful years ever.
Mr. Reed continued, However, we are not satisfied with the profitability of this hotel. I am pleased to announce today that Jay Sevigny, our SVP of Marketing and Attractions, has agreed to accept the additional position of President, Gaylord Opryland. Jay, in his new capacity, will provide operating oversight and focus special attention on customer service initiatives at the property.
Gaylord today announced the resignation of Ray Waters, SVP and General Manager of the Gaylord Opryland Resort and Convention Center.
On February 2nd, 2002, the Company opened the doors to a new state-of the-industry property, the Gaylord Palms Resort and Convention Center in Kissimmee, Florida. The Gaylord Palms property broke an industry record by pre-selling over one million room nights before its grand opening.
We are excited by the performance of the Gaylord Palms which opened to rave reviews, and we expect that it will be a consistently strong performer for Gaylord in the future, said Reed. We continue to receive extremely positive feedback on the property from meeting planners, convention organizers, and other potential customers.
Attractions
The attractions segment had a strong quarter punctuated by improved results at the Grand Ole Opry and Ryman Auditorium and favorable comparisons in the Company's live entertainment business. Revenue growth was driven by Corporate Magic, which continues its focus on cost controls and the implementation of a job tracking program.
Media
The media segment, comprised of Acuff-Rose music publishing and the Company's three radio stations, had a somewhat challenging quarter as advertising revenues declined at the radio stations. In January 2002, Gaylord re-affirmed its commitment to the Grand Ole Opry and the country format of its 650 WSM-AM radio station. As part of that commitment Gaylord has pledged to explore ways to expand the distribution of the Opry, and continue to provide quality country music to its loyal fan base.
We continue to be impressed by the loyalty of country fans and musicians to the Grand Ole Opry and 650 WSM-AM, and by their outpouring of support for these institutions, said Reed. We see an exciting opportunity to expand the audience for the Opry, and make it an even greater vehicle for showcasing not only the heritage, but the best of country music: past, present and future.
Corporate and Other
In the fourth quarter of 2001, Gaylord's corporate expenses and other segment recorded EBITDA of a negative $6.6 million, an improvement of 16.5% from the negative $7.9 million posted in the fourth quarter of 2000. Corporate expenses totaled $6.7 million for the quarter, a 9% decrease from the $7.3 million in the year earlier period. For the year 2001, corporate and other EBITDA was a negative $32.1 million, compared to a negative $31.6 million in the year earlier period. For the year 2001, corporate expenses were $33.1 million compared to $31.1 million in 2000.
Dispositions
On January 4, 2002, Gaylord completed the sale of its Christian Music label, Word Entertainment, to Warner Music Group for $84.1 million in cash. The sale came as a result of Gaylord's previously announced strategy to focus on its core and profitable hospitality, attractions and media businesses and divest itself of non-core assets. As a result of the closing of this transaction and the anticipated use of proceeds to reduce indebtedness, at year-end $80.0 million of the Company's debt was classified as a current liability and subsequently repaid at the closing of this transaction. In February 2002, the Company entered into a letter of intent to sell its international cable operations for an undisclosed sum. A transaction, if completed, would be consummated by February 28, 2002. If a transaction does not occur, the Company will cease funding of these operations on February 28, 2002. In 2001, these operations generated operating losses, before impairment and restructuring charges, of $6.4 million. The assets of the international cable operations have been written down to reflect management's estimate of fair market value. Impairment and restructuring charges totaling $24.9 million, including estimated exit costs, are included in discontinued operations in the fourth quarter of 2001.
Outlook
Looking forward, Mr. Reed said, We are operating in a very difficult market environment, however we are encouraged to see that the recession and events of 9/11 have not affected us to the same degree as our competitors. In 2002 we will look to further solidify our position as a leader in the convention hotel industry while developing synergies between our hospitality segment and attractions and media segments. We will actively market and promote our two existing convention hotel properties. In addition, we will continue the development of our Grapevine, Texas, Opryland Resort and Convention Center on a pace to be completed in summer 2004. We have a very unique collection of assets at Gaylord and we see a great opportunity to capitalize on their strong individual brands to create a powerful combination, and a large and loyal group of Gaylord customers.
That said, we have a lot of work to do on our existing operations. We are not satisfied with the performance of Gaylord Opryland. As we look to further develop the Gaylord Hotels brand, we need to ensure we have the best leadership in our flagship property Gaylord Opryland. I am confident that Jay Sevigny will provide that leadership. Jay's operating experience and focus on customer satisfaction will return the Gaylord Opryland to its preeminent position in the resort and convention market. Mr. Reed concluded, We will continue to capitalize on every opportunity to provide positive returns to our shareholders and grow this company.
Gaylord Entertainment will hold a conference call to discuss this release today at 10:00 a.m. eastern time. Investors will have the opportunity to listen to the conference call over the Internet at www.gaylordentertainment.com and at www.streetevents.com. To listen to the live call, please go to the web site at least fifteen minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call through the end of business on February 22, 2002.
This press release contains statements as to the company's beliefs and expectations of the outcome of future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include the risks and uncertainties associated with economic conditions affecting the hospitality business generally, the timing of the opening of new hotel facilities, costs associated with developing new hotel facilities, business levels at the Company's hotels, the ability to successfully complete potential divestitures, and the ability to consummate the financing for new developments. Other factors that could cause operating and financial results to differ are described in the filings made from time to time by Gaylord Entertainment with the Securities and Exchange Commission. Gaylord Entertainment does not undertake any obligation to release publicly any revisions to forward-looking statements made by it to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events.
Gaylord Entertainment, a leading hospitality and entertainment company based in Nashville, Tenn., owns and operates Gaylord Hotels branded properties, including the Gaylord Opryland Resort and Convention Center in Nashville, Tenn., and the Gaylord Palms Resort and Convention Center in Kissimmee, Fl. The company's entertainment brands include the Grand Ole Opry, Acuff-Rose Music Publishing, the Ryman Auditorium, the General Jackson showboat and WSM Radio. Gaylord Entertainment's stock is traded on the New York Stock Exchange under the symbol GET. For more information about the company visit www.gaylordentertainment.com.
GAYLORD ENTERTAINMENT COMPANY AND SUBSIDIARIES
CONSOLIDATED FINANCIAL RESULTS
(Amounts in thousands, except per share data)
Three Months Ended Year Ended
December 31, % December 31, %
2001 2000 chg 2001 2000 chg
Revenues
Hospitality $64,550 $65,133 (0.9) $228,712 $237,260 (3.6)
Attractions 17,561 15,523 13.1 65,878 63,235 4.2
Media 5,905 6,460 (8.6) 24,157 29,013 (16.7)
Corporate and other 270 208 29.8 6,412 5,954 7.7
Total revenues 88,286 87,324 1.1 325,159 335,462 (3.1)
EBITDA (a)
Hospitality (b) 8,825 22,208 (60.3) 44,367 70,147 (36.8)
Attractions 1,283 330 288.8 3,438 (1,582) -
Media 422 (3,684) - 4,243 (21,850) -
Corporate and
other (6,612) (7,919) 16.5 (32,105) (31,586) (1.6)
Total EBITDA 3,918 10,935 (64.2) 19,943 15,129 31.8
Operating
income (loss)
Hospitality (b) 2,276 15,857 (85.6) 18,774 45,700 (58.9)
Attractions (188) (1,431) 86.9 (2,372) (8,025) 70.4
Media (220) (6,647) 96.7 1,665 (31,500) -
Corporate
and other (8,222) (10,065) 18.3 (39,399) (38,626) (2.0)
Impairment and
other charges (2,874) (81,626) 96.5 (14,262) (81,626) 82.5
Restructuring
charges, net (4,486) (13,098) - (2,182) (13,098) -
Total
operating
loss (13,714) (97,010) 85.9 (37,776) (127,175) 70.3
Interest expense (9,408) (11,172) 15.8 (39,365) (30,319)(29.8)
Interest income 1,075 1,066 0.8 5,625 4,173 34.8
Unrealized gain
on Viacom stock 106,179 - - 782 - -
Unrealized gain
(loss) on
derivatives (86,937) - - 54,282 - -
Other (229) (1,336) 82.9 5,976 (1,277) -
Income (loss)
before taxes,
accounting
change and
discontinued
operations (3,034)(108,452) 97.2 (10,476) (154,598) 93.2
Income taxes (731) (34,639) 97.9 (3,188) (49,867) 93.6
Income (loss)
before accounting
change and
discontinued
operations (2,303) (73,813) 96.9 (7,288) (104,731) 93.0
Discontinued
operations, net
of taxes (20,845) (31,323) 33.5 (52,364) (48,739) (7.4)
Accounting change,
net of taxes - - - 11,909 - -
Net loss $(23,148)$(105,136) 78.0 $(47,743)$(153,470) 68.9
Net loss per
share - basic $ (0.69) $ (3.14) 78.0 $ (1.42) $ (4.60) 69.1
Average shares
outstanding 33,742 33,450 0.9 33,562 33,389 0.5
Net loss per
share - diluted $ (0.69) $(3.14) 78.0 $ (1.42) $ (4.60) 69.1
Average shares
outstanding 33,742 33,450 0.9 33,562 33,389 0.5
(a) Operating income plus depreciation, amortization, impairment
and restructuring charges
(b) Includes hotel preopening costs of $7,680 and $1,180,
respectively, for the three months ended December 31, 2001 and
2000, and $15,141 and $5,278, respectively, for the years
ended December 31, 2001 and 2000.
|
|
