Marriott Vacations Worldwide (“MVW”) Reports Third Quarter 2021 Financial Results
ORLANDO, Fla. – November 8, 2021 – Marriott Vacations Worldwide Corporation (NYSE: VAC) today reported third quarter 2021 financial results.
“Occupancies at our resorts this quarter were very strong despite the Delta variant and contract sales were within 3% of 2019 levels, driving 25% sequential growth in Adjusted EBITDA and exceeding 2019 for the first time since the pandemic began,” said Stephen P. Weisz, chief executive officer. “First time buyers represented more than 30% of contract sales in the third quarter, which is important for the long-term health of the system. The fourth quarter has started well with October contract sales above 2019 levels and reservations on the books for the first half of next year are already strong.”
Third Quarter 2021 Highlights and Operational Update:
- Consolidated Vacation Ownership contract sales totaled $380 million in the third quarter of 2021, with VPG 24% higher than the third quarter of 2019.
- Net income attributable to common shareholders was $10 million, or $0.23 fully diluted earnings per share.
- Adjusted net income attributable to common shareholders was $70 million and adjusted fully diluted earnings per share was $1.60.
- Adjusted EBITDA increased 25% on a sequential basis to $205 million in the third quarter of 2021, 8% higher than the third quarter of 2019.
- Adjusted EBITDA margin (excluding cost reimbursements) was 27%, the Company’s highest quarterly Adjusted EBITDA margin as a stand alone public company.
- During the quarter, the Company’s Board of Directors authorized a share repurchase program of up to $250 million and declared a quarterly cash dividend of $0.54 per share of common stock, which was paid in October 2021.
- In September, the Company repaid the remaining $250 million of its 6.50% Senior Unsecured Notes due 2026 and, subsequent to the end of the quarter, repaid $250 million of its 6.125% Senior Secured Notes due 2025.
- With recovery in the business expected to continue, the Company projects contract sales of $385 million to $405 million in the fourth quarter of 2021.
Third Quarter 2021 Segment Results
Vacation Ownership
Revenues excluding cost reimbursements increased 123% in the third quarter of 2021 compared to the prior year and increased 8% from the second quarter of 2021 as the business continued to recover. Compared to the second quarter, revenue from the sale of vacation ownership products increased 12% and Development profit margin increased to 28%. Excluding the impact of revenue reportability, Adjusted development profit increased sequentially to $98 million, with Adjusted development profit margin increasing nearly 335 basis points to 30%.
Vacation Ownership segment financial results were $185 million in the third quarter of 2021 and segment Adjusted EBITDA increased 18% on a sequential basis to $215 million, with Adjusted EBITDA margin nearly 360 basis points higher than third quarter 2019.
Exchange & Third-Party Management
Revenues excluding cost reimbursements increased 12% in the third quarter of 2021 compared to the prior year. Interval International active members declined 1% compared to the second quarter of 2021 to 1.3 million and Average revenue per member declined 7% sequentially.
Exchange & Third-Party Management segment financial results were $23 million in the third quarter of 2021 and segment Adjusted EBITDA declined $2 million sequentially to $35 million, with Adjusted EBITDA margin approximately 240 basis points higher than 2019.
Corporate and Other
General and administrative costs increased $22 million in the third quarter of 2021 compared to the prior year as a result of higher salary and wages costs as the prior year quarter benefited from savings related to programs implemented in response to the impact of the COVID-19 pandemic, higher bonus expense, and a decrease in credits related to incentives under the CARES Act.
Balance Sheet and Liquidity
On September 30, 2021, cash and cash equivalents totaled $448 million.
The Company had $4.4 billion in debt outstanding, net of unamortized debt issuance costs, at the end of the third quarter of 2021. This included $2.8 billion of corporate debt and $1.6 billion of non-recourse debt related to its securitized notes receivable.
In September, the Company repaid the remaining $250 million of its 6.50% Senior Unsecured Notes due 2026 and, subsequent to the end of the quarter, repaid $250 million of its 6.125% Senior Secured Notes due 2025. Pro forma, the Company ended the quarter with more than $1.0 billion of liquidity.
During the quarter, the Company’s Board of Directors authorized a share repurchase program of up to $250 million and declared a quarterly cash dividend of $0.54 per share of common stock, which was paid in October 2021.
Non-GAAP Financial Information
Non-GAAP financial measures, such as Adjusted net income or loss attributable to common shareholders, Adjusted EBITDA, Adjusted fully diluted earnings or loss per share, Adjusted development profit, Adjusted development profit margin, and other adjusted financial measures, are reconciled and adjustments are shown and described in further detail in the Financial Schedules that follow.
Third Quarter 2021 Financial Results Conference Call
The Company will hold a conference call on November 8, 2021 at 8:30 a.m. ET to discuss these financial results and provide an update on business conditions. Participants may access the call by dialing (877) 407-8289 or (201) 689-8341 for international callers. A live webcast of the call will also be available in the Investor Relations section of the Company’s website at ir.mvwc.com. An audio replay of the conference call will be available for 30 days on the Company’s website.
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About Marriott Vacations Worldwide Corporation
Marriott Vacations Worldwide Corporation is a leading global vacation company that offers vacation ownership, exchange, rental and resort and property management, along with related businesses, products and services. The Company has nearly 120 resorts and approximately 700,000 Owners and Members in a diverse portfolio that includes seven vacation ownership brands. It also includes exchange networks and membership programs comprised of 3,200 resorts in over 90 nations, as well as management of more than 150 other resorts and lodging properties. As a leader and innovator in the vacation industry, the Company upholds the highest standards of excellence in serving its customers, investors and associates while maintaining exclusive, long-term relationships with Marriott International, Inc. and Hyatt Hotels Corporation for the development, sales and marketing of vacation ownership products and services. For more information, please visit www.marriottvacationsworldwide.com.
Note on forward-looking statements
This press release and accompanying schedules contain “forward-looking statements” within the meaning of federal securities laws, including statements about expectations for business recovery and contract sales in the fourth quarter, that are not historical facts. The Company cautions you that these statements are not guarantees of future performance and are subject to numerous and evolving risks and uncertainties that we may not be able to predict or assess, such as: the effects of the COVID-19 pandemic, including reduced demand for vacation ownership and exchange products and services, volatility in the international and national economy and credit markets, worker absenteeism, quarantines or other government-imposed travel or health-related restrictions; the length and severity of the COVID-19 pandemic, including its short and longer-term impact on the demand for travel and on consumer confidence; the impact of the availability and distribution of effective vaccines on the demand for travel and consumer confidence; the effectiveness of available vaccines against variants of the virus, including the Delta variant; the pace of recovery following the COVID-19 pandemic or as effective treatments or vaccines become widely available; competitive conditions; the availability of capital to finance growth; the effects of steps we have taken and may continue to take to reduce operating costs and/or enhance health and cleanliness protocols at our resorts due to the COVID-19 pandemic; political or social strife, and other matters referred to under the heading “Risk Factors” contained herein and also in our most recent Annual Report on Form 10-K, and which may be discussed in our periodic filings with the U.S. Securities and Exchange Commission (the “SEC”), any of which could cause actual results to differ materially from those expressed or implied herein. There may be other risks and uncertainties that we cannot predict at this time or that we currently do not expect will have a material adverse effect on our financial position, results of operations or cash flows. These statements are made as of the date of issuance and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
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