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Mar 31, 2020
Marriott Vacations Q1 2020 Earnings Report
Reported preliminary financial results for Q1 2020 and provided an operational update on business conditions due to COVID-19.
Key Takeaways
Marriott Vacations Worldwide reported a challenging first quarter in 2020, impacted significantly by the COVID-19 pandemic. While consolidated contract sales decreased by 13%, the company took decisive actions to mitigate the financial impact, including cost reductions and deferring investments. The company expects a net loss attributable to common shareholders between $39 million and $114 million.
Consolidated vacation ownership contract sales decreased by 13% due to COVID-19 impact.
Net loss attributable to common shareholders is expected to be between $39 million and $114 million, or $0.95 and $2.75 loss per share.
Adjusted net income attributable to common shareholders is expected to increase 34% to $89 million, with adjusted EPS increasing 48% to $2.15.
Adjusted EBITDA is expected to decrease 17% to $138 million.
Marriott Vacations
Marriott Vacations
Marriott Vacations Revenue by Segment
Revenue by Segment
Sale of vacation ownership products Revenue
CapyFin.comManagement and exchange Revenue
CapyFin.comRental Revenue
CapyFin.comFinancing Revenue
CapyFin.comCost reimbursements Revenue
CapyFin.com Forward Guidance
Even if sales center closures and limited transient rentals were to persist, its cash position will provide it with adequate liquidity to fund its operations and debt service payments for the foreseeable future. The Company has no corporate debt maturities until September 2022 and is currently in compliance with all debt covenants.
Positive Outlook
- Available liquidity through at least 2021.
- Actions to defer inventory and other investments by up to $260 million to help mitigate the impact of COVID-19.
- Additional actions to substantially reduce its operating costs in the current environment.
- Increased the borrowing capacity of its warehouse facility by more than 50% to $531 million.
- Cash position will provide it with adequate liquidity to fund its operations and debt service payments for the foreseeable future.
Challenges Ahead
- The Company expects to report a 13% decline in first quarter consolidated vacation ownership contract sales.
- Net loss attributable to common shareholders is expected to be between a loss of $39 million and $114 million.
- The Company expects to record a non-cash asset impairment charge of $20 million to $100 million.
- Adjusted EBITDA is expected to decrease 17% to $138 million in the first quarter of 2020.
- Exchange & Third-Party Management revenues are expected to decrease 14% in the first quarter of 2020.
Revenue & Expenses
Visualization of income flow from segment revenue to net income