Silverleaf Resorts (AMEX:SVL)
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Silverleaf Resorts, Inc. (AMEX:SVL) today announced its
financial results for the year ended December 31, 2005.
2005 Financial Highlights:
-- Total revenue increased to $201.9 million
-- Vacation interval sales increased to $146.4 million
-- Improved efficiency leads to increased net income of $23.2
million
"Our efforts these past couple of years and specifically our
results for 2005 clearly demonstrate that we are successfully
executing on our strategy," commented Robert Mead, Chairman and CEO.
"More importantly, our results reflect the strength of our business
model as sales to existing customers enabled our net income growth to
outpace our revenue increase. We entered 2006 in a stronger financial
position compared to this time a year ago, enabling us to add new
facilities and resorts and the introduction of Silverleaf's first
off-site sales center, which is scheduled to open on March 8th, in the
Dallas, TX area. These investments in our business, combined with our
expense management, will enable us to have another strong year in
2006, as we are currently estimating core net income to increase 21%
to 25% over 2005."
Total revenue for 2005 increased to $201.9 million compared to
$183.7 million in 2004. Revenue for 2005 includes a gain on the sale
of notes receivable under a term securitization of $5.8 million, and a
gain on the sale of undeveloped land of $3.6 million. Net income for
the year ended December 31, 2005 increased to $23.2 million, or $0.59
per diluted share compared to net income of $13.8 million, or $0.35
per diluted share for the year ended December 31, 2004.
Vacation interval sales increased 6.1% to $146.4 million during
the year ended December 31, 2005 compared to $138.0 million during the
year ended December 31, 2004. The increase in sales for 2005 compared
to 2004 is due primarily to an increase in sales to existing owners,
which contributed to a reduction in sales and marketing expense to
50.1% of sales for all of 2005 from 51.3% for all of 2004, as
marketing expenses are lower for these sales. In addition, the
provision for uncollectible notes was 16.2% of vacation interval sales
for 2005, down from 19.4% in 2004, as a result of better performance
of notes originated since the company began focusing on selling to
customers with better credit characteristics.
2005 Fourth Quarter Financial Highlights:
-- Total revenue increased 6.4% to $48.2 million
-- Vacation interval sales increased 15.3% to $37.1 million
-- Pre-tax income increased 20.8% to $5.1 million
Total revenue for the fourth quarter of 2005 increased to $48.2
million from $45.3 million during the same period in 2004. Vacation
interval sales increased 15.3% to $37.1 million during the fourth
quarter of 2005 compared to $32.2 million during the fourth quarter of
2004. The increase in sales in the quarter ended December 31, 2005
compared to 2004 is due primarily to an increase in sales to existing
owners, which contributed to a reduction in sales and marketing
expense to 51.8% in the fourth quarter of 2005 from 55.6% of sales in
the fourth quarter of 2004, as marketing expenses are lower for these
sales.
During the fourth quarter of 2004, the company recorded a gain on
sale of notes receivable of $1.3 million, which did not recur in the
fourth quarter of 2005. In addition, the provision for uncollectible
notes was 15% of vacation interval sales for the fourth quarter of
2005, down from 17.5% in 2004, as a result of better performance of
notes originated since the company began focusing on selling to
customers with better credit characteristics. During the fourth
quarter of 2005, the company recorded income tax expense at 30.2%
pre-tax income, while in the fourth quarter of 2004, the company did
not record income tax expense due to utilizing various NOL items. As a
result of the increased tax provision in 2005, and gain on sale of
notes receivable in the fourth quarter of 2004, net income for the
fourth quarter decreased to $3.6 million, or $0.09 per diluted share,
compared to net income of $4.3 million, or $0.11 per diluted share,
for the fourth quarter of 2004.
Outlook
For the purposes of providing more transparency, the Company's
estimates in this press release include core operations, and exclude
historical gains and discontinued operations, and assume 2004 and 2005
amounts were fully taxed at the 2006 effective income tax rate of
38.5%.
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2004 2005 2006 Guidance
------ ------ -------------
Actual Actual Low High
------ ------ ------ ------
Net income, as reported $13.8 $23.2
Adjustments between net income as
reported, and core net income:
Gain on sale of notes receivable under a
term securitization - (5.8)
Gain on sale of undeveloped land - (3.6)
Income from discontinued operations, net
of taxes (0.6) (0.7)
Provision for income taxes, as reported - 9.7
------ ------
Core income before provision for
income taxes 13.2 22.8
Provision for income taxes at 38.5% core
rate (5.1) (8.8)
------ ------ ------ ------
Core Net Income $8.1 $14.0 $17.0 $17.5
====== ====== ====== ======
Core Fully Diluted EPS $0.21 $0.36 $0.43 $0.45
====== ====== ====== ======
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The Company is forecasting 2006 net income in the range of $17.0
million to $17.5 million, or $0.43 to $0.45 per diluted share. This
represents a 21% to 25% increase compared to 2005 core net income of
$14.0 million, or $0.36 per diluted share. In 2004, the Company's core
net income was $8.1 million, or $0.21 per diluted share.
About Silverleaf Resorts
Based in Dallas, Texas, Silverleaf Resorts, Inc. currently owns
and operates 13 timeshare resorts in various stages of development.
Silverleaf Resorts offer a wide array of country club-like amenities,
such as golf, swimming, horseback riding, boating, and many organized
activities for children and adults.
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 "Cautionary Statements" in the
Company's reports filed with the Securities and Exchange Commission,
including the Company's 2004 Annual Report on Form 10-K (pages 19
through 27 thereof) filed on March 25, 2005.
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SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share and per share amounts)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Revenues:
Vacation Interval
sales $37,112 $32,177 $146,416 $138,046
Sampler sales 864 666 2,623 2,150
----------- ----------- ----------- -----------
Total sales 37,976 32,843 149,039 140,196
Interest income 9,216 10,268 38,154 37,843
Management fee
income 505 300 1,856 1,201
Gain on sales of
notes receivable - 1,335 6,457 1,915
Other income 471 511 6,402 2,522
----------- ----------- ----------- -----------
Total revenues 48,168 45,257 201,908 183,677
Costs and Operating
Expenses:
Cost of Vacation
Interval sales 5,920 5,478 23,427 24,964
Sales and marketing 19,681 18,248 74,667 71,890
Provision for
uncollectible notes 5,566 5,631 23,649 26,811
Operating, general
and administrative 6,861 6,253 28,038 25,639
Depreciation and
amortization 566 952 2,723 3,588
Interest expense and
lender fees 4,488 4,484 17,253 17,627
----------- ----------- ----------- -----------
Total costs and
operating expenses 43,082 41,046 169,757 170,519
Income before
provision for
income taxes
and discontinued
operations 5,086 4,211 32,151 13,158
Provision for
income taxes (1,536) - (9,725) (23)
----------- ----------- ----------- -----------
Net income from
continuing operations 3,550 4,211 22,426 13,135
Discontinued Operations
Gain on sale of
discontinued
operations (net of
taxes) - - 613 -
Income from
discontinued
operations (net of
taxes) - 121 128 624
----------- ----------- ----------- -----------
Net income from
discontinued
operations - 121 741 624
Net income $3,550 $4,332 $23,167 $13,759
=========== =========== =========== ===========
Basic income per share:
Net income from
continuing
operations $0.10 $0.12 $0.61 $0.35
=========== =========== =========== ===========
Net income from
discontinued
operations $- $- $0.02 $0.02
=========== =========== =========== ===========
Net income $0.10 $0.12 $0.63 $0.37
=========== =========== =========== ===========
Diluted income per
share:
Net income from
continuing
operations $0.09 $0.11 $0.57 $0.33
=========== =========== =========== ===========
Net income from
discontinued
operations $- $- $0.02 $0.02
=========== =========== =========== ===========
Net income $0.09 $0.11 $0.59 $0.35
=========== =========== =========== ===========
Weighted average basic
shares outstanding: 37,190,670 36,860,238 36,986,926 36,852,133
=========== =========== =========== ===========
Weighted average
diluted shares
outstanding: 39,259,107 39,015,786 39,090,921 38,947,854
=========== =========== =========== ===========
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(Unaudited)
December 31, December 31,
ASSETS 2005 2004
------------- ------------
Cash and cash equivalents $10,990 $10,935
Restricted cash 4,893 3,428
Notes receivable, net of allowance for
uncollectible notes of $52,479 and
$52,506, respectively 177,572 196,466
Accrued interest receivable 2,243 2,207
Investment in special purpose entities 22,802 5,173
Amounts due from affiliates 680 288
Inventories 117,597 109,303
Land, equipment, buildings, and utilities,
net 10,441 24,375
Land held for sale 495 2,991
Prepaid and other assets 14,083 14,340
------------- ------------
TOTAL ASSETS $361,796 $369,506
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts payable and accrued expenses $9,556 $7,980
Accrued interest payable 1,354 1,302
Amounts due to affiliates 544 929
Unearned revenues 5,310 4,634
Taxes payable 1,268 -
Deferred taxes payable, net 8,485 -
Notes payable and capital lease obligations 177,269 218,310
Senior subordinated notes 33,175 34,883
------------- ------------
Total Liabilities 236,961 268,038
------------- ------------
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, 37,494,304
shares issued, 37,494,304 shares
outstanding at December 31, 2005, and
36,860,238 shares outstanding at
December 31, 2004 375 372
Additional paid-in capital 112,207 116,614
Retained earnings (deficit) 12,253 (10,914)
Treasury stock, at cost, 0 shares at
December 31, 2005 and 388,768 shares at
December 31, 2004 - (4,604)
------------- ------------
Total Shareholders' Equity 124,835 101,468
------------- ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $361,796 $369,506
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