Travel + Leisure Co. Reports First Quarter 2021 Results

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04/28/2021 - 06:30 AM

Travel + Leisure Co. (NYSE:TNL), the world’s leading membership and leisure travel company, today reported first quarter 2021 financial results for the three months ended March 31, 2021. Highlights and outlook include:

Net income of $29 million and diluted earnings per share of $0.33 on net revenue of $628 million
Adjusted EBITDA of $129 million and adjusted diluted earnings per share of $0.39 ⁽¹⁾
Net cash provided by operating activities of $78 million and adjusted free cash flow of $20 million for the first three months of 2021
Fully paid down revolving credit facility and $250 million of secured notes
Executed $500 million term securitization with best terms in Company history
Expects second quarter adjusted EBITDA from $160 million to $170 million
Management will recommend a second quarter dividend of $0.30 per share for approval by the Board of Directors

"Our operating performance strengthened significantly in March, with a robust sequential improvement in our key metrics," commented Michael D. Brown, president and CEO of Travel + Leisure Co. "Increased consumer confidence, reduced travel restrictions, and the vaccine roll-out have all helped to accelerate bookings and leisure travel demand."

"We are encouraged by the strength of booking trends in March and into April in both the Vacation Ownership and Travel and Membership segments. In March, North American bookings for 2021-arrivals at both our businesses were up double-digits versus 2019, after double-digit declines in January and February. We are clearly seeing an inflection in travel sentiment which we believe points to a strong recovery in leisure travel heading into the summer," said Brown.

^{(1) This press release includes adjusted EBITDA, adjusted diluted EPS, adjusted free cash flow, gross VOI sales and adjusted net income/(loss), which are metrics that are not calculated in accordance with Generally Accepted Accounting Principles in the U.S. (“GAAP”). See "Presentation of Financial Information" and the tables for the definitions and reconciliations of these non-GAAP measures in accordance with GAAP.}

Business Segment Results

The results of operations during the first quarter of 2021 and 2020 include impacts related to the COVID-19 global pandemic, which have been significantly negative to the travel industry, the Company, its customers and employees. Refer to Table 8 for a breakout of COVID-19 related impacts.

*Vacation Ownership*
$ in millions	2021		2020		% change
Revenue	$449		$403		11	%
Net Income/(Loss)	$31		($97)		132	%
Net Income Margin	7	%	(24)	%
Adjusted EBITDA	$66		($75)		188	%
Adjusted EBITDA Margin	15	%	(19)	%

Vacation Ownership revenue increased 11% to $449 million in the first quarter, primarily driven by the impact of the $225 million COVID-19 provision charge in the prior year. Gross vacation ownership interest (VOI) sales of $236 million was 43% below the prior year. Tours were 53% lower year-over-year, offset in part by higher Volume Per Guest (VPG), which increased 34% to $2,847.

First quarter adjusted EBITDA was $66 million compared to a loss of $75 million in the prior year. The increase was driven by cost savings initiatives and higher VPG in 2021 as well as the absence of the $170 million net COVID-19 loan loss provision charge in the first quarter of 2020.