Travel + Leisure Co. Reports First Quarter 2021 Results


ORLANDO, Fla. (April 28, 2021) 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.

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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.

Travel and Membership

$ in millions 2021 2020 % change
Revenue $183 $159 15%
Net Income/(Loss) $42 ($8) 625%
Net Income Margin 23% (5)%  
Adjusted EBITDA $75 $44 70%
Adjusted EBITDA Margin  41% 28%  

Travel and Membership revenue increased 15% to $183 million in the first quarter. Domestic bookings began to improve, particularly in March, and net transactions in the first quarter were 513,000, an increase of 28% compared to the same period last year.

Adjusted EBITDA increased 70% to $75 million. The increase in adjusted EBITDA margin to 41% was primarily driven by margin expansion, due to increased revenue over the segment's fixed cost base, as well as cost savings initiatives implemented in 2020.

Balance Sheet and Liquidity

Net Debt — As of March 31, 2021, the Company's leverage ratio for covenant purposes was 5.4x, well within the 7.5x amended covenant under the Company's credit agreement. The Company had $3.4 billion of corporate debt outstanding as of March 31, 2021, which excluded $2.2 billion of non-recourse debt related to its securitized notes receivables portfolio. Additionally, the Company had cash and cash equivalents of $322 million. The Company used cash on hand to fully pay down $547 million of its revolving credit facility and $250 million of secured notes due in March 2021. At the end of the first quarter, the Company had $1.3 billion of liquidity available in cash and cash equivalents and revolving credit facility availability.

Timeshare Receivables Financing — During the quarter, an affiliate of Travel + Leisure Co. closed on a $500 million term securitization transaction with a weighted average coupon of 1.57% and 98% advance rate, which were the best terms in the Company's history.

Cash Flow For the three months ended March 31, 2021, net cash provided by operating activities was $78 million, compared to $57 million in the prior year period. Adjusted free cash flow was $20 million for the three months ended March 31, 2021, compared to negative $78 million in the same period of 2020.

Dividend The Company paid $26 million ($0.30 per share) in cash dividends on March 31, 2021 to shareholders of record as of March 15, 2021. Management will recommend a second quarter dividend of $0.30 per share for approval by the Company’s Board of Directors in May 2021.

Outlook

The Company is providing guidance regarding expectations for the second quarter of 2021:

  • Adjusted EBITDA of $160 million to $170 million

  • Gross VOI sales of $355 million to $365 million

  • Tours of 118,000 to 123,000

  • VPG to be approximately $2,800

This guidance is presented only on a non-GAAP basis because not all of the information necessary for a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measure is available without unreasonable effort, primarily due to uncertainties relating to the occurrence or amount of these adjustments that may arise in the future.

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Conference Call Information

Travel + Leisure Co. will hold a conference call with investors to discuss the Company’s results and outlook today at 8:30 a.m. ET. Participants may listen to a simultaneous webcast of the conference call, which may be accessed through the Company's website at investor.travelandleisureco.com, or by dialing 866-342-8591, passcode TNL, 10 minutes before the scheduled start time. For those unable to listen to the live broadcast, an archive of the webcast will be available on the Company's website for 90 days beginning at 12:00 p.m. ET today. Additionally, a telephone replay will be available for four days beginning at 12:00 p.m. ET today at 800-753-5575.

Presentation of Financial Information

Financial information discussed in this press release includes non-GAAP measures such as adjusted EBITDA, adjusted diluted EPS, adjusted free cash flow, gross VOI sales, and adjusted net income/(loss), which include or exclude certain items, as well as non-GAAP guidance. The Company utilizes non-GAAP measures, defined in Table 9, on a regular basis to assess performance of its reportable segments and allocate resources. These non-GAAP measures differ from reported GAAP results and are intended to illustrate what management believes are relevant period-over-period comparisons and are helpful to investors when considered with GAAP measures as an additional tool for further understanding and assessing the Company’s ongoing operating performance by adjusting for items which in our view do not necessarily reflect ongoing performance. Management also internally uses these measures to assess our operating performance, both absolutely and in comparison to other companies, and in evaluating or making selected compensation decisions. Exclusion of items in the Company’s non-GAAP presentation should not be considered an inference that these items are unusual, infrequent or non-recurring. Full reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures for the reported periods appear in the financial tables section of the press release. See definitions on Table 9 for an explanation of our non-GAAP measures.

About Travel + Leisure Co.

Travel + Leisure Co. is the world’s leading membership and leisure travel company, with nearly 20 travel brands across its resort, travel club, and lifestyle portfolio. The company provides outstanding vacation experiences and travel inspiration to millions of owners, members, and subscribers every year through its products and services: Wyndham Destinations, the largest vacation ownership company with more than 245 vacation club resort locations across the globe; Panorama, the world’s foremost membership travel business that includes the largest vacation exchange company, industry-leading travel technology, and subscription travel brands; and Travel + Leisure Group, featuring top online and print travel content, online booking platforms and travel clubs, and branded consumer products. At Travel + Leisure Co., our global team of associates brings hospitality to millions, turning vacation inspiration into exceptional travel experiences. We put the world on vacation. Learn more at travelandleisureco.com.

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