Earnings Alert: ILG, Inc. (NASDAQ: ILG)

On Friday, Shares of ILG, Inc. (NASDAQ: ILG) gained 0.13% to $34.47. The stock opened its trade at $34.36 and after floating in a price range of $34.33 to $34.57; the stock grabbed the investor’s attention and traded 236.47K shares as compared to its average daily volume of 1.95M shares. The stock’s institutional ownership stands at 83.10%.

ILG (ILG) recently declared results for the first quarter ended March 31, 2018.

First quarter consolidated operating results:

Consolidated revenue was $482.0M, and excluding the estimated hurricane impact, it would have been $501.0M, up 13% over the prior year driven by strong performance in our vacation ownership segment.

Net income attributable to common stockholders was $43.0M. Excluding the estimated impact of the hurricanes it would have been $48.0M, up 9% contrast to the prior year. Diluted earnings per share (EPS) was $0.34, contrast to $0.35.

Adjusted net income was $46.0M, contrast to $42.0M in 2017. Excluding the estimated impact from the hurricane, it would have been $50.0M, up 19% contrast to the prior year. Adjusted diluted EPS was $0.36. Excluding the impact from the hurricane it would have been $0.39, higher by 18%.

Adjusted EBITDA increased 7% to $98.0M. Excluding the impact from the hurricane, it would have been $104.0M, a boost of 13% contrast to 2017.

Business segment results:

Vacation Ownership:

Excluding cost reimbursements, Vacation Ownership segment revenue increased $53.0M, to $267.0M principally as a result of the following:

  • $27.0M increase in management fee and other revenue predominantly attributable to revenue from the consolidation of our HOAs starting in the fourth quarter of 2017. This increase is mostly offset by a corresponding decrease in cost reimbursement revenue.
  • $18.0M increase in sales of vacation ownership products principally attributable to higher consolidated contract sales mostly because of an 11% increase in tour flow.
  • $5.0M increase in resort operations revenue mainly driven by higher available and occupied room nights and average daily rate resulting from the increase in the number of units which came on-line starting in the second quarter of 2017.

Vacation Ownership segment operating income increased 6% to $17.0M and adjusted EBITDA was higher by $3.0M to $36.0M driven mainly from higher VO sales and stronger performance in our resort operations. Excluding the impact of the hurricanes, the increase in Adjusted EBITDA would have been $8.0M to $41.0M, 24% higher than 2017.

Exchange and Rental:

Exchange and Rental segment revenue was $171.0M dollars, relatively consistent with 2017. Excluding cost reimbursements, segment revenue was up 3% to $150.0M dollars related to stronger club rental revenue resulting from the above- mentioned increase in available and occupied room nights and average daily rate.

Total Interval Network active members at quarter-end were 1.80M, consistent with 2017, and average revenue per member was $53.17, up 2%.

Operating income for the segment was $49.0M, up 4%. Adjusted EBITDA for the segment increased 5% to $62.0M dollars mainly driven by the stronger club rental activity. Excluding the estimated hurricane impact, the increase in Adjusted EBITDA would have been 7%.

Capital Resources and Liquidity:

As of March 31, 2018, ILG’s cash and cash equivalents totaled $158.0M, contrast to $122.0M on December 31, 2017, and we had $204.0M of eligible unsecuritized receivables.

The principal amount outstanding of long term corporate debt as of March 31, 2018 was $570.0M consisting of $350.0M 5 5/8% Senior Notes and $220.0M drawn under our revolving credit facility.

ILG had $366.0M available on its revolving credit facility, net of outstanding letters of credit as of March 31, 2018.

Net cash and restricted cash offered by operating activities in the first three months of 2018 was $152.0M contrast to $58.0M. The $94.0M increase was principally due higher net cash receipts partly attributable to property insurance proceeds of $42.0M related mainly to the damage caused by the 2017 hurricanes on our Westin St. John resort. In addition, inventory spend was lower by $36.0M and restricted cash increased $27.0M mainly reflecting the collection of maintenance fees following the consolidation of our HOAs starting in the fourth quarter of last year.

Net cash used in investing activities was $16.0M mainly related to capex associated with resort operations and sales and marketing locations, as well as IT programs. Capex in the quarter includes an offsetting $3.0M of insurance proceeds for hurricane property damage.

Net cash and restricted cash used in financing activities was $75.0M, reflecting $45.0M repayments on securitized debt, a dividend payment of $22.0M, and $8.0M withholding tax on the vesting of restricted stock units and shares.

Free cash flow for the quarter was $66.0M, contrast to $54.0M in 2017. The change is mainly a result of the increase in net cash and restricted cash offered by operating activities, and lower capital expenditures, partially offset by higher net securitization activities, counting higher repayments on securitizations.

ILG has a market value of $4.31B while its EPS was booked as $1.73 in the last 12 months. The stock has 125.12M shares outstanding. In the profitability analysis, the company has gross profit margin of 48.60% while net profit margin was 9.10%. Beta value of the company was 1.42; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 1.80.

Marion Frost

Marion Frost

I am Marion Frost and I have over 16 years experience in the financial services industry giving me a vast understanding of how news affects the financial markets. I am an active day trader spending the majority of my time analyzing earnings reports and watching commodities and derivatives. I have a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.