SIOUX FALLS, S.D., July 19, 2012 /PRNewswire/ -- LodgeNet
Interactive Corporation (Nasdaq:LNET) reported quarterly revenue of
$92.8 million compared to
$106.6 million in the second quarter
of 2011. Operating loss(1) was $(95.5)
million versus operating income of $8.2 million during last year's second
quarter. Net loss attributable to common stockholders(1) was
$(103.1) million or $(4.08) per share compared to $(4.4) million or $(0.17) per share loss during the second quarter
of 2011. Operating loss and net loss attributable to common
stockholders for the second quarter of 2012 included a $94.0 million non-cash, one-time impairment
charge(1) associated with certain goodwill and purchased
intangibles. Excluding such charges, operating loss would
have been $(1.5) million and net loss
attributable to common stockholders $(9.1)
million or $(0.36) per share.
Adjusted Operating Cash Flow(2) for the quarter was $19.2 million compared to $26.4 million in the second quarter of
2011.
(Logo:
http://photos.prnewswire.com/prnh/20080115/AQTU120LOGO)
The following financial highlights are in thousands, except
per share data:
|
|
Three
Months Ended June 30,
|
|
|
2012
|
|
2011
|
|
|
|
|
|
Total
revenue
|
|
$
92,784
|
|
$
106,635
|
Operating (loss) income before impairment
charges
|
|
(1,532)
|
|
8,178
|
Goodwill and other impairment
charges(1)
|
|
94,008
|
|
-
|
(Loss)
income from operations(1)
|
|
(95,540)
|
|
8,178
|
Net
loss(1)
|
|
(101,661)
|
|
(2,924)
|
Net
loss attributable to common stockholders
(1)
|
|
(103,093)
|
|
(4,361)
|
Net
loss per common share (basic and diluted)
(1)
|
|
$
(4.08)
|
|
$
(0.17)
|
|
|
|
|
|
Adjusted Operating Cash Flow
|
|
$
19,245
|
|
$
26,419
|
Average
shares outstanding (basic and diluted)
|
|
25,239
|
|
25,064
|
(1)
|
These
results include our preliminary estimate for the non-cash charges
pending completion of our assessment and the review by our external
auditors. We will have the final results incorporated in our
Form 10-Q.
|
(2)
|
Adjusted Operating Cash Flow is a non-GAAP measure
which we define as Operating Income exclusive of depreciation,
amortization, share-based compensation, impairment and
restructuring and reorganization expenses.
|
"With the industry's largest room base, innovative multi-screen
solutions, and national reach LodgeNet has a solid competitive
position," said Phillip Spencer,
LodgeNet's interim President and CEO. "However, we face a
number of challenges in regard to our Guest Entertainment
performance and room churn, both of which continue to impact the
company's financial performance. Room loss is a key focus for
all of our employees, as it directly impacts our results and our
ability to sell additional value-added services. We are
working as quickly as possible to stabilize our room base and
improve our revenue performance. There are many operational
and cultural changes underway at LodgeNet. We have already
implemented increased customer satisfaction programs, we are
focused on improving our customer service with 'One Call
Resolution,' we are simplifying our contracting process and
reducing the time between order and installation. In
addition, a full review of our programming packages and prices is
currently underway. We are committed to offering a price
competitive product with a high level of service. We believe
all of these steps will help transform LodgeNet back into a nimble
competitor, intent on winning every contract and once again growing
our room base."
"Results in the quarter primarily reflect a $94 million non-cash charge for the impairment of
Goodwill and Purchased Intangibles," said LodgeNet Senior Vice
President and CFO Frank P.
Elsenbast. "The charge relates primarily to the
Goodwill and Purchase Intangibles created in 2007 at the time of
the On Command acquisition. While these charges had a
significant impact on our Net Income for the quarter, it is
important to note that these were non-cash charges and in no way
impact our ability to operate our business on a going-forward
basis. We continue to prudently manage our operations and
delivered a 8% reduction in cash Operating Expenses in the
quarter. We generated Free Cash Flow of nearly $18 million in the quarter after funding
$11 million dollars of capital
investment as we installed 15,000 HD rooms. In addition, we
reduced our outstanding debt by $19 million
to $329 million."
During the quarter, the Company made continued progress on
certain strategic initiatives. The LodgeNet Mobile App
footprint was expanded and now reaches over 600,000 rooms.
App functionality was further expanded with the recent
introduction of an Interactive Program Guide (IPG) feature that
allows guests to view detailed channel programming information on
their mobile device. The successful rollout of the LodgeNet
Mobile App was recognized by the Web Marketing Association as the
winner of the 2012 Best Hotel and Lodging Mobile Application. In
addition, LodgeNet increased its Envision footprint with the
addition of 18,000 contracted rooms, bringing the total rooms under
contract to 88,000. And finally, LodgeNet continues to expand
its market share within the very attractive hospitality gaming
market. The Company recently signed on eight new properties
representing 6,000 new rooms.
"Our renewed commitment to churn reduction and Guest
Entertainment stabilization will be critical to our future
success," continued Spencer. "I believe we will make progress
on these initiatives and see a stabilization of our financial
performance which will allow us to accelerate the development of
our growth opportunities. We are committed to further
diversifying our revenue, controlling our cost structure and
improving free cash flow."
RESULTS FROM OPERATIONS
THREE MONTHS ENDED JUNE 30,
2012 VERSUS
THREE MONTHS ENDED JUNE 30,
2011
Total revenue for the second quarter of 2012 was $92.8 million, a $13.9
million or 13.0% decline compared to the same period of
2011. The decline in revenue was attributable in part to a
decrease in the number of rooms receiving our services, which
contributed to declines in Guest Entertainment and Television
Programming revenue. Revenue from system sales and
Professional Services work increased $2.7
million or 26.6% quarter over quarter. On a per-room
basis, total Hospitality and Advertising Services revenue was 1.4%
less than last year's second quarter. Revenue per room
generated from non-Guest Entertainment services increased 13.5%
period over period.
Guest Entertainment revenue decreased $13.8 million, or 24.3%, due to a 12.2% reduction
in the average number of Guest Entertainment rooms served and a
13.4% decline in revenue per room from Hollywood and non-theatrical movies.
Hotel Services revenue was $32.2
million in the second quarter, a decline of 5.8% versus the
prior year quarter, primarily because of a 9.6% decline in the
number of rooms receiving TV Programming services. Revenue
per room for Hotel Services increased by 7.0% versus last year,
driven primarily from an increase in the number of rooms receiving
HD service and the expiration of contracts with unfavorable terms.
System Sales and Related Services revenue per room improved
44.5%, driven primarily by TV programming system sales and
professional services work. Our advertising services
subsidiary generated revenue of $1.4
million, an expected decrease of 36.1% compared to the
second quarter of 2011, as we continue the transition of our
advertising platform from an analog platform to our expanded, all
HD platform. Additionally, our Healthcare subsidiary
generated $3.2 million of revenue
during the second quarter.
Total direct costs (exclusive of operating expenses and
depreciation and amortization discussed separately below) decreased
$5.0 million or 8.3%, to $55.1 million in the second quarter of 2012 as
compared to $60.1 million in the
second quarter of 2011. Direct costs declined primarily due
to lower sales volume in Guest Entertainment and Hotel Services,
resulting in lower hotel commissions, royalties and programming
fees. Advertising Services fixed costs were lower due to the
transition to our new advertising platform.
System Operations and Selling, General and Administrative
("SG&A") expenses decreased $1.6
million or 7.6%, to $19.0
million in the second quarter of 2012 as compared to
$20.6 million in the second quarter
of 2011. Factors driving the improvement period over period
included reductions in system repair costs, professional services
and content distribution costs, as well as from our expense
reduction initiatives, which included the reduction of select
personnel, other payroll related expenses and facilities.
Depreciation and Amortization expenses increased to $18.0 million in the second quarter of 2012 as
compared to $17.8 million in the
second quarter of 2011.
As part of the 2007 acquisitions of On Command and StayOnline,
Goodwill and Intangible assets were created. During the
second quarter of 2012, we concluded that recent declines in
revenue and profits in our Hospitality business have impacted the
recovery of our goodwill. The recent declines in Guest
Entertainment revenue, our room base and our market capitalization
triggered an assessment of the recoverability of goodwill on an
interim basis. As a result of our preliminary analysis, we
have recorded a non-cash asset impairment charge in our Hospitality
segment of $92.6 million related to
goodwill. In addition, we have recorded a $1.4 million non-cash asset impairment charge in
our Hospitality segment related to intangible assets associated
with our Broadband services. These asset impairment amounts are
preliminary and pending completion of our assessment and the review
by our external auditors. Our final results for the quarter
will be included in our Form 10-Q.
As a result of factors described above, preliminary operating
loss was $(95.5) million in the
second quarter of 2012 as compared to operating income of
$8.2 million in the second quarter of
2011. Adjusted Operating Cash Flow ("AOCF"), a non-GAAP
measure, was $19.2 million for the
second quarter of 2012 as compared to $26.4
million in the second quarter of 2011. As a percent of
revenue, AOCF margin was 20.7% this quarter versus 24.8% for the
prior year quarter.
Interest expense decreased $5.1
million or 46.3% to $5.9
million in the second quarter of 2012 versus $11.0 million in the second quarter of
2011. Our outstanding debt decreased $39.2 million or 10.7%, to $328.8 million compared to
$368.0 million at the end of the
second quarter of 2011. The average interest rate for the
second quarter of 2012 was 6.6% versus 12.0% last year. The
decline in interest expense and rate was a result of the final
quarterly payment on our interest rate swap agreements during the
second quarter of 2011. The interest rate swap agreements
expired in June 2011.
On a preliminary basis, net loss attributable to common
stockholders was $(103.1) million for
the second quarter of 2012, compared to a net loss of $(4.4) million in the prior year quarter.
Preliminary net loss per share attributable to common stockholders
was $(4.08) for the second quarter of
2012 (basic and diluted) versus a net loss per share of
$(0.17) in the second quarter of 2011
(basic and diluted). Excluding the $94
million non cash, one-time impairment charge this quarter,
net loss attributable to common stockholders would have been
$(9.1) million or $(0.36) per share.
For the second quarter of 2012, cash provided by operating
activities was $28.6 million as
compared to $8.4 million in the
second quarter of 2011. Cash used for capital investments was
$10.9 million during the second
quarter of 2012 compared to $6.0
million in the second quarter of 2011. During the
quarter, the Company installed 15,344 High Definition interactive
rooms along with 8,633 standard digital rooms, as compared to
12,250 rooms and 842 standard digital during the second quarter of
2011. Quarter over quarter, the average capital per High
Definition room installed was $143
per room this quarter versus $140 per
room last year.
Outlook
LodgeNet's focus over the next twelve months will be addressing
room churn and leveling Guest Entertainment revenue. As the
Company addresses these two challenges and the impact they continue
to have on the business, as well as the market uncertainties
that the Company has been experiencing, the Company has decided to
withdraw its financial guidance for 2012.
The Company will host a teleconference to discuss its results
July 19, 2012, at 5:00 P.M. Eastern Time. A live webcast of
the teleconference will also be available and can be accessed on
the LodgeNet website at www.lodgenet.com. The webcast will be
archived on the LodgeNet website for one month. Additionally,
the Company has posted slides at its website under the For
Investors, Company Presentations section, which will be referenced
during the conference call.
Special Note Regarding the Use of Non-GAAP Financial
Information
To supplement our consolidated financial statements presented in
accordance with accounting principles generally accepted in
the United States ("GAAP"), we use
Adjusted Operating Cash Flow, Free Cash Flow and Net Debt, which
are non-GAAP measures derived from results based on GAAP. The
presentation of this additional information is not meant to be
considered superior to, in isolation of, or as a substitute for,
results prepared in accordance with GAAP. Adjusted Operating
Cash Flow is a non-GAAP measure which we define as operating income
(loss) exclusive of depreciation, amortization, share-based
compensation, impairment, restructuring and reorganization expenses
and debt issuance costs. Free Cash Flow, a non-GAAP measure,
is defined by the Company as cash provided by operating activities
less cash used for investing activities. Net Debt is our
total outstanding debt less our cash. These non-GAAP measures
are key liquidity indicators but should not be construed as an
alternative to GAAP measures or as a measure of our profitability
or performance. We provide information about these measures
because we believe it is a useful way for us, and our investors, to
measure our ability to satisfy cash needs, including one-time
charges such as restructuring, reorganization or integration,
interest payments on our debt, taxes and capital
expenditures. In addition, Net Debt provides an indication of
our ability to remain in compliance with financial covenants.
Our method of computing these measures may not be comparable to
other similarly titled measures of other companies.
About LodgeNet
LodgeNet Interactive Corporation is the leading provider of
interactive media and connectivity services to hospitality and
healthcare businesses and the consumers they serve. LodgeNet
Interactive serves approximately 1.6 million hotel rooms worldwide
in addition to healthcare facilities throughout the United States. The Company's services
include: Interactive Television, Broadband, Mobile and Advertising
Media Solutions along with nationwide technical and professional
support services. LodgeNet Interactive Corporation owns and
operates businesses under the industry leading brands: LodgeNet,
The Hotel Networks and LodgeNet Healthcare. LodgeNet Interactive is
listed on NASDAQ and trades under the symbol LNET. For more
information, please visit www.lodgenet.com.
Special Note Regarding Forward-Looking Statement –
Certain statements in this press release constitute
"forward-looking statements." Such forward-looking statements
are subject to risks, uncertainties and other factors that could
cause the actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the
following: uncertainties relating to our ability to reduce room
churn and stabilize revenues; the effects of economic conditions,
including general financial conditions; the economic condition of
the lodging industry, which can be particularly affected the
financial conditions referenced above, as well as by high gas
prices, levels of unemployment, consumer confidence, acts or
threats of terrorism and public health issues; competition from
providers of similar services and from alternative systems for
accessing in-room entertainment; competition from HSIA providers;
changes in demand for our products and services; programming
availability, timeliness, quality and costs; technological
developments by competitors; developmental costs, difficulties and
delays; relationships with customers and property owners, in
particular as we reduce capital investment; the availability of
capital to finance growth; compliance with credit facility
covenants; the impact of governmental regulations; potential
effects of litigation; risks of diversification into new products,
services, or markets; risks related to the security of our data
systems; and other factors detailed, from time to time, in our
filings with the Securities and Exchange Commission. For any of the
foregoing reasons, our guidance and our actual financial results
may not meet our expectations. These forward-looking
statements speak only as of the date of this press release. We
expressly disclaim any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in our expectations with
regard thereto or any change in events, conditions or circumstances
on which any such statement is based.
LodgeNet, the LodgeNet logo, Envision and PowerPortal are
trademarks or registered trademarks of LodgeNet Interactive
Corporation. All rights reserved. Other names and brands may be
claimed as the property of others.
(See attached financial and operational tables)
LodgeNet Interactive Corporation and
Subsidiaries
|
Consolidated Balance Sheets
|
(Dollar
amounts in thousands, except share data)
|
|
|
|
|
|
|
|
(Preliminary & Unaudited)
|
|
|
|
|
|
(Audited)
|
|
|
June
30,
|
|
December
31,
|
|
|
2012
|
|
2011
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash
|
|
$
7,344
|
|
$
14,019
|
Accounts
receivable, net
|
|
40,284
|
|
53,963
|
Other
current assets
|
|
11,087
|
|
11,021
|
Total
current assets
|
|
58,715
|
|
79,003
|
|
|
|
|
|
Property
and equipment, net
|
|
114,249
|
|
119,164
|
Debt
issuance costs, net
|
|
3,129
|
|
4,373
|
Intangible
assets, net
|
|
86,519
|
|
91,642
|
Goodwill
|
|
7,467
|
|
100,081
|
Other
assets
|
|
13,261
|
|
14,409
|
Total
assets
|
|
$
283,340
|
|
$
408,672
|
|
|
|
|
|
Liabilities and Stockholders' Deficiency
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
65,448
|
|
$
48,255
|
Current
maturities of long-term debt
|
|
12,877
|
|
10,395
|
Accrued
expenses
|
|
18,472
|
|
18,813
|
Deferred
revenue
|
|
19,152
|
|
19,949
|
Total
current liabilities
|
|
115,949
|
|
97,412
|
|
|
|
|
|
Long-term
debt
|
|
315,938
|
|
352,905
|
Other
long-term liabilities
|
|
7,440
|
|
9,296
|
Total
liabilities
|
|
439,327
|
|
459,613
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders' deficiency:
|
|
|
|
|
Preferred
stock, $.01 par value, 5,000,000 shares
authorized;
|
|
|
|
|
Series B
cumulative perpetual convertible, 10%, 57,500 issued;
57,266
|
|
|
|
outstanding at June 30, 2012 and December 31, 2011,
respectively
|
|
|
|
|
(liquidation preference of $1,000 per share;
$57,266,000 total at
|
|
|
|
|
June 30,
2012 and December 31, 2011, respectively)
|
|
1
|
|
1
|
Common
stock, $.01 par value, 50,000,000 shares authorized;
|
|
|
|
|
25,607,309
and 25,272,734 shares outstanding at June 30, 2012
|
|
|
|
|
and
December 31, 2011, respectively
|
|
256
|
|
253
|
Additional
paid-in capital
|
|
383,411
|
|
384,843
|
Accumulated deficit
|
|
(542,286)
|
|
(438,527)
|
Accumulated other comprehensive income
|
|
2,631
|
|
2,489
|
Total
stockholders' deficiency
|
|
(155,987)
|
|
(50,941)
|
Total
liabilities and stockholders' deficiency
|
|
$
283,340
|
|
$
408,672
|
LodgeNet Interactive Corporation and
Subsidiaries
|
Consolidated Statements of Operations (Preliminary
& Unaudited)
|
(Dollar
amounts in thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
Revenues:
|
|
|
|
|
|
|
|
|
Hospitality and Advertising Services
|
|
$
89,541
|
|
$
103,389
|
|
$
181,335
|
|
$
209,223
|
Healthcare
|
|
3,243
|
|
3,246
|
|
6,145
|
|
5,140
|
Total
revenues
|
|
92,784
|
|
106,635
|
|
187,480
|
|
214,363
|
|
|
|
|
|
|
|
|
|
Direct
costs and operating expenses:
|
|
|
|
|
|
|
|
|
Direct
costs (exclusive of operating expenses and
|
|
|
|
|
|
|
|
|
depreciation and amortization shown separately
below):
|
|
|
|
|
|
Hospitality and Advertising Services
|
|
53,163
|
|
58,580
|
|
107,908
|
|
117,939
|
Healthcare
|
|
1,961
|
|
1,527
|
|
3,810
|
|
2,450
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
System
operations
|
|
8,210
|
|
9,733
|
|
17,144
|
|
19,801
|
Selling,
general and administrative
|
|
10,804
|
|
10,839
|
|
19,991
|
|
20,528
|
Depreciation and amortization
|
|
18,022
|
|
17,783
|
|
33,241
|
|
37,423
|
Goodwill
impairment charge
|
|
92,614
|
|
-
|
|
92,614
|
|
-
|
Restructuring charge
|
|
3,533
|
|
3
|
|
4,165
|
|
1,164
|
Other
operating expense (income)
|
|
17
|
|
(8)
|
|
(31)
|
|
(21)
|
Total
direct costs and operating expenses
|
|
188,324
|
|
98,457
|
|
278,842
|
|
199,284
|
|
|
|
|
|
|
|
|
|
(Loss)
income from operations
|
|
(95,540)
|
|
8,178
|
|
(91,362)
|
|
15,079
|
|
|
|
|
|
|
|
|
|
Other
income and (expenses):
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(5,887)
|
|
(10,962)
|
|
(11,851)
|
|
(18,633)
|
Loss on
early retirement of debt
|
|
(156)
|
|
-
|
|
(312)
|
|
(158)
|
Other
income (expense)
|
|
9
|
|
(3)
|
|
23
|
|
315
|
|
|
|
|
|
|
|
|
|
Loss
before income taxes
|
|
(101,574)
|
|
(2,787)
|
|
(103,502)
|
|
(3,397)
|
Provision
for income taxes
|
|
(87)
|
|
(137)
|
|
(257)
|
|
(435)
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(101,661)
|
|
(2,924)
|
|
(103,759)
|
|
(3,832)
|
Preferred
stock dividends
|
|
(1,432)
|
|
(1,437)
|
|
(2,863)
|
|
(2,875)
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to common stockholders
|
|
$
(103,093)
|
|
$
(4,361)
|
|
$
(106,622)
|
|
$
(6,707)
|
|
|
|
|
|
|
|
|
|
Net loss
per common share (basic and diluted)
|
|
$
(4.08)
|
|
$
(0.17)
|
|
$
(4.23)
|
|
$
(0.27)
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding (basic and diluted)
|
|
25,239,460
|
|
25,063,669
|
|
25,202,313
|
|
25,050,469
|
|
|
|
|
|
|
|
|
|
LodgeNet Interactive Corporation and
Subsidiaries
|
Consolidated Statements of Cash Flows (Preliminary
& Unaudited)
|
(Dollar
amounts in thousands)
|
|
|
|
|
|
|
|
Six Months
Ended June 30,
|
|
|
2012
|
|
2011
|
Operating
activities:
|
|
|
|
|
Net
loss
|
|
$(103,759)
|
|
$
(3,832)
|
Adjustments to reconcile net loss to net cash
provided
|
|
|
|
|
by
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
33,241
|
|
37,423
|
Gain on
derivative instruments
|
|
-
|
|
(1,511)
|
Goodwill
impairment charge
|
|
92,614
|
|
-
|
Loss on
early retirement of debt
|
|
312
|
|
158
|
Share-based compensation and restricted
stock
|
|
901
|
|
869
|
Deferred
tax benefit
|
|
36
|
|
-
|
Other,
net
|
|
990
|
|
262
|
Change in
operating assets and liabilities:
|
|
|
|
|
Accounts
receivable, net
|
|
13,699
|
|
2,166
|
Other
current assets
|
|
931
|
|
632
|
Accounts
payable
|
|
17,192
|
|
(4,126)
|
Accrued
expenses and deferred revenue
|
|
(3,661)
|
|
(4,953)
|
Other
|
|
(1,118)
|
|
526
|
Net cash
provided by operating activities
|
|
51,378
|
|
27,614
|
|
|
|
|
|
Investing
activities:
|
|
|
|
|
Property
and equipment additions
|
|
(20,081)
|
|
(10,595)
|
Net cash
used for investing activities
|
|
(20,081)
|
|
(10,595)
|
|
|
|
|
|
Financing
activities:
|
|
|
|
|
Repayment
of long-term debt
|
|
(37,000)
|
|
(5,525)
|
Payment of
capital lease obligations
|
|
(326)
|
|
(407)
|
Borrowings
on revolving credit facility
|
|
25,000
|
|
45,000
|
Repayments
of revolving credit facility
|
|
(25,000)
|
|
(45,000)
|
Debt
issuance costs
|
|
-
|
|
(2,444)
|
Proceeds
from investment in long-term debt
|
|
2,160
|
|
323
|
Payment of
dividends to preferred shareholders
|
|
(2,863)
|
|
(2,875)
|
Exercise
of stock options
|
|
10
|
|
7
|
Net cash
used for financing activities
|
|
(38,019)
|
|
(10,921)
|
|
|
|
|
|
Effect of
exchange rates on cash
|
|
47
|
|
-
|
(Decrease)
increase in cash
|
|
(6,675)
|
|
6,098
|
Cash at
beginning of period
|
|
14,019
|
|
8,381
|
|
|
|
|
|
Cash at
end of period
|
|
$
7,344
|
|
$14,479
|
LodgeNet Interactive Corporation and
Subsidiaries
|
Supplemental Data
|
|
|
|
|
|
|
|
|
|
|
|
|
2nd Qtr
'12
|
|
1st Qtr
'12
|
|
4th Qtr
'11
|
|
3rd Qtr
'11
|
|
2nd Qtr
'11
|
Room Base
Statistics (at quarter end)
|
|
|
|
|
|
|
|
|
|
|
|
Total
Rooms Served (1)
|
|
1,552,701
|
|
1,587,229
|
|
1,621,529
|
|
1,693,745
|
|
1,753,132
|
|
Total
Guest Entertainment Rooms (2)
|
|
1,417,932
|
|
1,447,034
|
|
1,477,442
|
|
1,551,204
|
|
1,608,079
|
|
Total HD
Rooms(3)
|
|
341,855
|
|
326,145
|
|
309,239
|
|
294,396
|
|
285,626
|
|
Percent of Total Guest Entertainment Rooms
|
|
24.1%
|
|
22.5%
|
|
20.9%
|
|
19.0%
|
|
17.8%
|
|
Total
Envision Rooms (4)
|
|
62,498
|
|
43,681
|
|
18,542
|
|
5,087
|
|
3,785
|
|
Percent of Total Guest Entertainment Rooms
|
|
4.4%
|
|
3.0%
|
|
1.3%
|
|
0.3%
|
|
0.2%
|
|
Total
Mobile Rooms (5)
|
|
610,350
|
|
572,322
|
|
-
|
|
-
|
|
-
|
|
Percent of Total Guest Entertainment Rooms
|
|
43.0%
|
|
39.6%
|
|
-
|
|
-
|
|
-
|
|
Total
Television Programming (FTG) Rooms(6)
|
|
894,373
|
|
918,574
|
|
938,270
|
|
960,965
|
|
989,133
|
|
Percent of Total Guest Entertainment Rooms
|
|
63.1%
|
|
63.5%
|
|
63.5%
|
|
61.9%
|
|
61.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
Per Room Statistics (per month)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality and Advertising Services
|
|
|
|
|
|
|
|
|
|
|
|
Guest
Entertainment
|
|
$9.97
|
|
$
10.46
|
|
$
10.91
|
|
$
11.88
|
|
$
11.56
|
|
Hotel
Services
|
|
7.47
|
|
7.28
|
|
7.10
|
|
7.03
|
|
6.98
|
|
System
Sales and Related Services
|
|
3.02
|
|
2.82
|
|
2.73
|
|
2.43
|
|
2.09
|
|
Advertising Services
|
|
0.33
|
|
0.29
|
|
0.61
|
|
0.50
|
|
0.46
|
|
Total
Hospitality and Advertising Services
|
|
$20.79
|
|
$
20.85
|
|
$
21.35
|
|
$
21.84
|
|
$
21.09
|
|
Based on
average Guest Entertainment rooms
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary
Operating Results
|
|
|
|
|
|
|
|
|
|
|
(Dollar
amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospitality and Advertising Services
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Guest
Entertainment
|
|
$
42,929
|
|
$
46,069
|
|
$
49,807
|
|
$
56,691
|
|
$
56,691
|
|
Hotel
Services
|
|
32,175
|
|
32,052
|
|
32,426
|
|
33,555
|
|
34,173
|
|
System
Sales and Related Services
|
|
12,990
|
|
12,386
|
|
12,471
|
|
11,587
|
|
10,261
|
|
Advertising Services
|
|
1,447
|
|
1,287
|
|
2,792
|
|
2,366
|
|
2,264
|
|
Total
Hospitality and Advertising Services
|
|
89,541
|
|
91,794
|
|
97,496
|
|
104,199
|
|
103,389
|
|
Healthcare
|
|
3,243
|
|
2,901
|
|
2,555
|
|
2,648
|
|
3,246
|
|
Total
Revenue
|
|
$
92,784
|
|
$
94,695
|
|
$
100,051
|
|
$
106,847
|
|
$
106,635
|
|
Adjusted
Operating Cash Flow(7)
|
|
$
19,245
|
|
$
20,315
|
|
$
22,691
|
|
$
27,010
|
|
$
26,419
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted Operating Cash Flow to
(Loss) Income From Operations
|
|
|
|
|
|
(Dollar
amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
Operating Cash Flow
|
|
$
19,245
|
|
$
20,315
|
|
$
22,691
|
|
$
27,010
|
|
$
26,419
|
|
Depreciation and Amortization
|
|
(15,001)
|
|
(13,515)
|
|
(16,006)
|
|
(15,344)
|
|
(16,052)
|
|
Amortization of Acquired Intangibles
|
|
(3,021)
|
|
(1,704)
|
|
(1,730)
|
|
(1,731)
|
|
(1,731)
|
|
Share
Based Compensation and Restricted Stock
|
|
(616)
|
|
(286)
|
|
(427)
|
|
(324)
|
|
(455)
|
|
Impairment
Charge(8)
|
|
(92,614)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Restructuring Charge
|
|
(3,533)
|
|
(632)
|
|
(26)
|
|
(732)
|
|
(3)
|
|
(Loss)
Income From Operations(8)
|
|
$
(95,540)
|
|
$
4,178
|
|
$
4,502
|
|
$
8,879
|
|
$
8,178
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Total rooms served represents rooms
receiving one or more of our services including rooms served by
international licensees.
|
(2) Guest Entertainment rooms, of which
93% are digital, receive one or more Guest Entertainment Services
such as movies, video games, music or other interactive
services.
|
(3) HD rooms are equipped with
high-definition capabilities.
|
(4) Guest Entertainment rooms installed
with our Envision Interactive platform.
|
(5) Guest Entertainment rooms compatible
with the LodgeNet Mobile App.
|
(6) Television programming (FTG) rooms
receiving basic or premium television programming.
|
(7) Adjusted Operating Cash Flow is a
non-GAAP measure which we define as Income (Loss) From Operations
exclusive of depreciation, amortization, share-based compensation,
impairment and restructuring and reorganization
expenses.
|
(8) These results include our preliminary
estimate for the non-cash charges pending the completion of
assessment with our independent auditors. We will have the
final results incorporated in our 10Q.
|
SOURCE LodgeNet Interactive Corporation