Silverleaf Resorts (AMEX:SVL)
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From Jun 2019 to Jun 2024
Silverleaf Resorts, Inc. (AMEX:SVL) today announced its
financial results for the three and six month periods ended June 30,
2006.
2006 Second Quarter Financial Highlights:
-- Vacation Interval sales increased by 30.3% to $48.6 million
-- Net income increased by 59.8% to $6.8 million
Sharon K. Brayfield, President, commented, "The first half of 2006
has been well ahead of our initially projected growth expectations for
the period. We have achieved these results by continuing to increase
sales efficiencies. This has allowed us to maximize our closing rate
on Vacation Interval sales for new and existing customers. Based on
reported results through the first half of 2006 we now expect this
increased level of efficiency can be maintained through the remainder
of 2006. Furthermore, sustaining these sales efficiencies should allow
us to meet our plan of 10-15% top-line growth for 2007.
2006 Second Quarter Results:
Vacation Interval sales increased 30.3% to $48.6 million during
the second quarter of 2006 compared to $37.3 million during the second
quarter of 2005. Vacation Interval sales to new customers increased
36.9% to $22.0 million on a 13.8% increase in new customer tours.
Vacation Interval sales to existing customers increased 25.3% to $26.7
million on a 6.9% increase in existing customer tours.
Total revenue for the second quarter of 2006 increased to $53.0
million compared to $49.4 million in the second quarter of 2005. Total
revenue in the second quarter of 2006 is decreased by estimated
uncollectible revenue of $8.4 million in accordance with SFAS No. 152,
representing estimated future gross cancellations of notes receivable
prior to any recoveries of inventory. In addition, under SFAS No. 152,
sampler sales are accounted for as incidental operations, which
requires that any such incidental revenues be recorded as a reduction
of incremental costs or expenses. Accordingly, $0.7 million of sampler
sales, which would have been reported as revenue prior to adoption of
SFAS No. 152, were accounted for as a reduction to sales and marketing
expense in the quarter ended June 30, 2006. Had these two changes
mandated by SFAS No. 152 not been made, revenues would have increased
by 25.9% to $62.2 million.
Sales and marketing expense decreased to 48.2% of Vacation
Interval sales for the second quarter of 2006 from 48.6% for the
second quarter of 2005. Had sales and marketing expense not been
reduced by sampler sales, as described above, sales and marketing
expense would have been 49.6% of Vacation Interval sales.
Cost of Vacation Interval sales decreased to 9.7% of Vacation
Interval sales in 2006 from 16.1% in 2005, due predominantly to the
requirement under SFAS No. 152 that cost of sales be reduced by the
estimated future recoveries of inventory, as described above. Without
this change, cost of Vacation Interval sales would have been 14.1% of
Vacation Interval sales for the quarter ended June 30, 2006.
As required by SFAS No. 152, in 2006 there is no longer a cost and
operating expense for the provision for uncollectible notes as it is
now replaced by the estimated uncollectible revenue offset to sales
and corresponding decrease in cost of sales described above. Without
this change, the second quarter 2006 provision for uncollectible notes
expense would have been $6.3 million, or 13.0% of second quarter 2006
Vacation Interval sales, compared to $6.5 million for 2005, or 17.5%
of Vacation Interval sales.
During the second quarter of 2006, Silverleaf recorded income tax
expense at 38.5% of pre-tax income, compared to 35.1% of pre-tax
income in the second quarter of 2005. The increase in the effective
rate is due to the transition in 2005 from fully reserved net deferred
tax assets at December 31, 2004 to net deferred tax liabilities at
December 31, 2005. Income tax expense for 2006 is therefore recorded
at full statutory rates.
Net income for the quarter ended June 30, 2006 increased to $6.8
million, or $0.17 per diluted share compared to net income of $4.2
million, or $0.11 per diluted share for the quarter ended June 30,
2005.
2006 Year to Date Results:
Vacation Interval sales increased 33.5% to $90.1 million during
the first six months of 2006 compared to $67.5 million during the
first half of 2005. Vacation Interval sales to new customers increased
35.1% to $41.9 million on a 10.4% increase in new customer tours.
Vacation Interval sales to existing customers increased 32.2% to $48.2
million on a 4.1% increase in existing customer tours.
Total revenue for the first half of 2006 increased to $98.7
million compared to $91.4 million in the first half of 2005. Total
revenue in the first half of 2006 is decreased by estimated
uncollectible revenue of $15.6 million in accordance with SFAS No.
152, representing estimated future gross cancellations of notes
receivable prior to any recoveries of inventory. In addition, under
SFAS No. 152, sampler sales are accounted for as incidental
operations, which requires that any such incidental revenues be
recorded as a reduction of incremental costs or expenses. Accordingly,
$1.5 million of sampler sales, which would have been reported as
revenue prior to adoption of SFAS No. 152, were accounted for as a
reduction to sales and marketing expense in the six-month period ended
June 30, 2006. Had these two changes mandated by SFAS No. 152 not been
made, revenues would have increased by 26.6% to $115.8 million.
Sales and marketing expense decreased to 47.3% of Vacation
Interval sales for the first half of 2006 from 52.4% for the first
half of 2005. Had sales and marketing expense not been reduced by
sampler sales, as described above, sales and marketing expense would
have been 49.0% of Vacation Interval sales.
Cost of Vacation Interval sales decreased to 9.9% of Vacation
Interval sales in the first half of 2006 from 15.9% during the same
period of 2005, due predominantly to the requirement under SFAS No.
152 that cost of sales be reduced by the estimated future recoveries
of inventory, as described above. Without this change, cost of
Vacation Interval sales would have been 14.2% of Vacation Interval
sales for the six months ended June 30, 2006.
As required by SFAS No. 152, in 2006 there is no longer a cost and
operating expense for the provision for uncollectible notes as it is
now replaced by the estimated uncollectible revenue offset to sales
and corresponding decrease in cost of sales described above. Without
this change, the first half of 2006 provision for uncollectible notes
expense would have been $11.7 million, or 13.0% of 2006 Vacation
Interval sales, compared to $11.8 million for 2005, or 17.5% of
Vacation Interval sales.
During the first half of 2006, Silverleaf recorded income tax
expense at 38.5% of pre-tax income, compared to 30.3% of pre-tax
income in the first half of 2005. The increase in the effective rate
is due to the transition in 2005 from fully reserved net deferred tax
assets at December 31, 2004 to net deferred tax liabilities at
December 31, 2005. Income tax expense for 2006 is therefore recorded
at full statutory rates.
Net income for the six months ended June 30, 2006 increased to
$13.0 million, or $0.33 per diluted share compared to net income of
$6.8 million, or $0.17 per diluted share for the six months ended June
30, 2005.
Adoption of SFAS No. 152:
As previously announced, the Company was required to adopt SFAS
No. 152, "Accounting for Real Estate Time-Sharing Transactions" as of
January 1, 2006. As a result, new line items are included in the
Company's Consolidated Statement of Operations and total revenue and
total costs and expenses are reduced. However, adoption of SFAS No.
152 did not affect net income and did not have a material impact on
consolidated results of operations or financial position. See the
exhibit to this release entitled "Supplemental Consolidated Statements
of Operations Demonstrating the Impact of Adoption of SFAS No. 152"
for a comparison of the Company's results as reported and as its
results would have been reported had SFAS No. 152 not been adopted.
Outlook
The Company continues to anticipate that its net income for the
year ended December 31, 2006 will be its previously issued guidance of
$21 million to $22 million ($0.53 to $0.56 per diluted share).
About Silverleaf Resorts
Based in Dallas, Texas, Silverleaf Resorts, Inc. currently owns
and operates timeshare resorts with a wide array of country club-like
amenities, such as golf, clubhouses, swimming, tennis, boating, and
many organized activities for children and adults. For additional
information, please visit www.silverleafresorts.com.
This release contains certain forward-looking statements that
involve risks and uncertainties and actual results may differ
materially from those anticipated. The Company is subject to specific
risks associated with the timeshare industry, the regulatory
environment, and various economic factors. These risks and others are
more fully discussed under the heading "Risk Factors" in the Company's
reports filed with the Securities and Exchange Commission, including
the Company's 2005 Annual Report on Form 10-K (pages 22 through 30
thereof) filed on March 17, 2006.
For more information or to visit our website, click here:
http://www.b2i.us/irpass.asp?BzID=1358&Nav=0&S=0&L=1
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SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
Revenues:
Vacation Interval
sales $48,635 $37,334 $90,102 $67,471
Estimated
uncollectible
revenue (8,428) -- (15,615) --
Sampler sales -- 501 -- 1,142
----------- ----------- ----------- -----------
Net sales 40,207 37,835 74,487 68,613
Interest income 11,323 10,113 21,418 19,871
Management fee
income 465 450 930 900
Gain on sale of
notes receivable -- -- -- 669
Other income 1,038 957 1,870 1,382
----------- ----------- ----------- -----------
Total
revenues 53,033 49,355 98,705 91,435
Costs and Operating
Expenses:
Cost of Vacation
Interval sales 4,736 6,017 8,917 10,735
Sales and marketing 23,423 18,153 42,655 35,337
Provision for
uncollectible notes -- 6,534 -- 11,808
Operating, general
and administrative 8,181 7,105 15,370 13,833
Depreciation and
amortization 584 744 1,123 1,542
Interest expense and
lender fees 5,117 4,286 9,542 8,671
----------- ----------- ----------- -----------
Total costs
and operating
expenses 42,041 42,839 77,607 81,926
Income before
provision for
income taxes and
discontinued
operations 10,992 6,516 21,098 9,509
Provision for
income taxes (4,232) (2,285) (8,123) (2,884)
----------- ----------- ----------- -----------
Income from continuing
operations 6,760 4,231 12,975 6,625
Discontinued
Operations
Income from
discontinued
operations
(net of taxes) -- -- -- 128
----------- ----------- ----------- -----------
Net income $6,760 $4,231 $12,975 $6,753
=========== =========== =========== ===========
Basic income per
share:
Income from
continuing
operations $0.18 $0.11 $0.35 $0.18
=========== =========== =========== ===========
Income from
discontinued
operations $-- $-- $-- $--
=========== =========== =========== ===========
Net income $0.18 $0.11 $0.35 $0.18
=========== =========== =========== ===========
Diluted income per
share:
Income from
continuing
operations $0.17 $0.11 $0.33 $0.17
=========== =========== =========== ===========
Income from
discontinued
operations $-- $-- $-- $--
=========== =========== =========== ===========
Net income $0.17 $0.11 $0.33 $0.17
=========== =========== =========== ===========
Weighted average basic
common shares
outstanding 37,501,246 36,937,648 37,497,794 36,899,620
=========== =========== =========== ===========
Weighted average
diluted common shares
outstanding 39,250,633 38,933,675 39,217,335 38,874,506
=========== =========== =========== ===========
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SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
June 30, December 31,
ASSETS 2006 2005
----------- ------------
(Unaudited)
Cash and cash equivalents $7,883 $10,990
Restricted cash 9,267 4,893
Notes receivable, net of allowance for
uncollectible notes of $68,171 and $52,479,
respectively 202,430 177,572
Accrued interest receivable 2,618 2,243
Investment in special purpose entity 17,375 22,802
Amounts due from affiliates 2,595 680
Inventories 143,442 117,597
Land, equipment, and leasehold improvements,
net 15,718 10,441
Land held for sale 203 495
Prepaid and other assets 16,588 14,083
----------- ------------
TOTAL ASSETS $418,119 $361,796
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $9,197 $9,556
Accrued interest payable 1,612 1,354
Amounts due to affiliates 855 544
Unearned Vacation Interval sales 591 --
Unearned samplers 5,675 5,310
Income taxes payable 3,068 1,268
Deferred income taxes payable 12,832 8,485
Notes payable and capital lease obligations 213,978 177,269
Senior subordinated notes 32,321 33,175
----------- ------------
Total Liabilities 280,129 236,961
----------- ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Preferred stock, 10,000,000 shares
authorized, none issued and outstanding -- --
Common stock, par value $0.01 per share,
100,000,000 shares authorized, 37,545,972
shares issued and outstanding at June 30,
2006, and 37,494,304 shares issued and
outstanding at December 31, 2005 375 375
Additional paid-in capital 112,387 112,207
Retained earnings 25,228 12,253
----------- ------------
Total Shareholders' Equity 137,990 124,835
----------- ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $418,119 $361,796
=========== ============
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SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS
DEMONSTRATING IMPACT OF ADOPTION OF SFAS NO. 152
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended June 30, 2006
-------------------------------------- Three Month
As Reported - Comparable to 2005 - Ended
Reflects Adoption Does Not Reflect June 30,
of SFAS No.152 SFAS No. 152 2005
----------------- -------------------- ------------
Revenues:
Vacation
Interval sales $48,635 $48,635 $37,334
Estimated
uncollectible
revenue (8,428) -- --
Sampler sales -- 691 501
All other
revenue 12,826 12,826 11,520
----------------- -------------------- ------------
Total
revenues 53,033 62,152 49,355
Costs and
Operating
Expenses:
Cost of Vacation
Interval sales 4,736 6,842 6,017
Sales and
marketing 23,423 24,114 18,153
Provision for
uncollectible
notes -- 6,322 6,534
All other costs
and expenses 13,882 13,882 12,135
----------------- -------------------- ------------
Total costs
and
operating
expenses 42,041 51,160 42,839
Income before
provision for
income taxes
and
discontinued
operations 10,992 10,992 6,516
Provision for
income taxes (4,232) (4,232) (2,285)
----------------- -------------------- ------------
Net income from
continuing
operations 6,760 6,760 4,231
Discontinued
Operations
Net income from
discontinued
operations (net
of taxes) -- -- --
----------------- -------------------- ------------
Net income $6,760 $6,760 $4,231
================= ==================== ============
Basic income per
share:
Net income from
continuing
operations $0.18 $0.18 $0.11
================= ==================== ============
Net income from
discontinued
operations $-- $-- $--
================= ==================== ============
Net income $0.18 $0.18 $0.11
================= ==================== ============
Diluted income per
share:
Net income from
continuing
operations $0.17 $0.17 $0.11
================= ==================== ============
Net income from
discontinued
operations $-- $-- $--
================= ==================== ============
Net income $0.17 $0.17 $0.11
================= ==================== ============
Weighted average
basic common
shares
outstanding 37,501,246 37,501,246 36,937,648
================= ==================== ============
Weighted average
diluted common
shares
outstanding 39,250,633 39,250,633 38,933,675
================= ==================== ============
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS
DEMONSTRATING IMPACT OF ADOPTION OF SFAS NO. 152
(in thousands, except share and per share amounts)
(Unaudited)
Six Months Ended June 30, 2006
-------------------------------------- Six Months
As Reported - Comparable to 2005 - Ended
Reflects Adoption Does Not Reflect June 30,
of SFAS No.152 SFAS No. 152 2005
----------------- -------------------- -----------
Revenues:
Vacation Interval
sales $90,102 $90,102 $67,471
Estimated
uncollectible
revenue (15,615) -- --
Sampler sales -- 1,459 1,142
All other revenue 24,218 24,218 22,822
----------------- -------------------- -----------
Total
revenues 98,705 115,779 91,435
Costs and Operating
Expenses:
Cost of Vacation
Interval sales 8,917 12,819 10,735
Sales and
marketing 42,655 44,114 35,337
Provision for
uncollectible
notes -- 11,713 11,808
All other costs
and expenses 26,035 26,035 24,046
----------------- -------------------- -----------
Total costs
and
operating
expenses 77,607 94,681 81,926
Income before
provision for
income taxes and
discontinued
operations 21,098 21,098 9,509
Provision for
income taxes (8,123) (8,123) (2,884)
----------------- -------------------- -----------
Net income from
continuing
operations 12,975 12,975 6,625
Discontinued
Operations
Net income from
discontinued
operations (net
of taxes) -- -- 128
----------------- -------------------- -----------
Net income $12,975 $12,975 $6,753
================= ==================== ===========
Basic income per
share:
Net income from
continuing
operations $0.35 $0.35 $0.18
================= ==================== ===========
Net income from
discontinued
operations $-- $-- $--
================= ==================== ===========
Net income $0.35 $0.35 $0.18
================= ==================== ===========
Diluted income per
share:
Net income from
continuing
operations $0.33 $0.33 $0.17
================= ==================== ===========
Net income from
discontinued
operations $-- $-- $--
================= ==================== ===========
Net income $0.33 $0.33 $0.17
================= ==================== ===========
Weighted average
basic common
shares outstanding 37,497,794 37,497,794 36,899,620
================= ==================== ===========
Weighted average
diluted common
shares outstanding 39,217,335 39,217,335 38,874,506
================= ==================== ===========
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