Hilton Grand Vacations (HGV) Misses Q4 EPS by $1.77, Revenues Miss

Hilton Grand Vacations (NYSE: HGV) reported Q4 EPS of ($1.81), $1.77 worse than the analyst estimate of ($0.04). Revenue for the quarter came in at $212 million versus the consensus estimate of $244.34 million.

Fourth Quarter 2020 Results1

• Contract sales in the fourth quarter were $132 million.
• Net Owner Growth (NOG) for the 12 months ended Dec. 31, 2020, was 0.7%.
• Total revenues for the fourth quarter were $212 million compared to $468 million for the same period in 2019.
  • Total revenues were affected by deferrals of $21 million and $35 million in the current period and the same period in 2019, respectively.
• Net loss for the fourth quarter was ($154) million compared to $72 million net income for the same period in 2019.
  • Net (loss) income was affected by net deferrals of $11 million and $19 million for the current period and the same period in 2019, respectively.
  • Net loss for the fourth quarter was impacted by a non-cash impairment expense of $209 million primarily due to the commencement of a sale process for certain unused parcels of excess land, and the associated mark-to-market impact.
• Diluted EPS for the fourth quarter was ($1.81) compared to $0.83 for the same period in 2019.
  • Diluted EPS was affected by net deferrals of $11 million and $19 million, or $0.13 and $0.22 per share in the current period and the same period in 2019, respectively.
  • Net loss for the fourth quarter was impacted by a non-cash impairment expense of $2.46 per share primarily due to the commencement of a sale process for certain unused parcels of excess land, and the associated mark-to-market impact.
• Adjusted EBITDA for the fourth quarter was $24 million compared to $105 million for the same period in 2019.
  • Adjusted EBITDA was affected by net deferrals of $11 million and $19 million in the current period and the same period in 2019, respectively.
• In addition to the adverse impact from the closure of HGV sales centers and resort operations, the COVID-19 pandemic had the following impacts on total revenues, net loss, diluted EPS and Adjusted EBITDA for the fourth quarter:
  • $3 million or $0.04 per share benefit from an employee retention credit granted primarily under the CARES Act, primarily related to payments made to employees as a result of operational closures caused by the COVID-19 pandemic.

“In 2020 we acted decisively to protect our business and position HGV for long-term growth as the recovery progresses,” said Mark Wang, president and CEO of Hilton Grand Vacations. “I’m pleased that we were able to deliver our second consecutive quarter of sequential revenue and profitability growth since re-starting our operations this past summer, as well as positive adjusted free cash flow for the full year. As a result, we entered 2021 with a strong balance sheet and significant financial flexibility, including over $700 million of available liquidity. Looking ahead, we’re focused on ramping our Hawaii operations and re-opening our remaining markets, along with opening new resorts in Maui, Charleston, and Okinawa later this year. The health and safety of our guests and employees remains our top priority. I want to thank our team members for their tireless efforts to maintain a safe environment and create memorable vacation experiences for our guests.”

For earnings history and earnings-related data on Hilton Grand Vacations (HGV) click here.

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