RHP - Ryman Hospitality Properties Inc. Reports First Quarter 2019 Results

NASHVILLE, Tenn., May 07, 2019 (GLOBE NEWSWIRE) -- Ryman Hospitality Properties, Inc. (NYSE: RHP), a lodging real estate investment trust ("REIT") specializing in group-oriented, destination hotel assets in urban and resort markets, today reported financial results for the first quarter ended March 31, 2019.

First Quarter 2019 Results (as compared to First Quarter 2018):

• Same-Store RevPAR increased 5.4% and Same-Store Total RevPAR increased 6.4%
• Consolidated Net Income available to Common Shareholders Increased 7.6% to $29.4 Million
• Consolidated Adjusted EBITDAre Increased 40.5% to $114.9 Million 
• Funds From Operations Available to Common Shareholders Increased 30.7% to $73.7 Million; Adjusted Funds From Operations Available to Common Shareholders Increased 27.7% to $77.8 Million
• Same-Store Gross Room Night Bookings of 334,179 Room Nights for All Future Years
• Gaylord Rockies Performed Above Expectations in its First Full Quarter of Operation
• Updates Full Year Guidance

Colin Reed, Chairman and Chief Executive Officer of Ryman Hospitality Properties, said, “Our businesses delivered a strong start to the year as we began to realize the benefits of the many development projects we completed in 2018.  The newest Gaylord Hotels property, Gaylord Rockies, got off to a successful start in the first quarter of 2019, and we are excited for the potential of this property.  The indoor portion of our SoundWaves water experience at Gaylord Opryland exceeded our expectations in its first quarter of operation, and as we head into the summer season, we look forward to the upcoming opening of the outdoor portion of this facility in mid-May. We are pleased to see the success of the expansion at Gaylord Texan, which contributed to growth in occupancy at that property. We are thrilled with the early contributions of these growth projects and remain enthusiastic about their role in maximizing the strong outlook we see for the group segment in the years ahead.

Given our record-setting fourth quarter 2018 bookings results of one million room nights (excluding Gaylord Rockies) and the tremendous number of room nights we had on the books for all future years at the end of fourth quarter 2018, we were not surprised by the year-over-year decline in first quarter 2019 group bookings. Based on the outlook for our group sales leads coupled with how groups are performing once they travel, we remain confident in the group segment for the foreseeable future.

Our Entertainment segment also delivered strong results in the first quarter of 2019, driven by solid performance from our core assets as well as our Ole Red properties. Our Ole Red footprint continued to expand in the first quarter with the opening of the newest location in Gatlinburg, Tennessee. This location is off to a great start, and work is underway on our next location, Ole Red Orlando, which is slated to open in 2020.”

First Quarter 2019 Results (As Compared to First Quarter 2018):

Consolidated Results

Note: For the Company’s definitions of Operating Income margin, Net Income available to common shareholders margin, Adjusted EBITDAre, Adjusted EBITDAre margin, Adjusted EBITDAre, excluding noncontrolling interest, Adjusted EBITDAre, excluding noncontrolling interest margin, FFO available to common shareholders, and Adjusted FFO available to common shareholders, as well as a reconciliation of the non-GAAP financial measure Adjusted EBITDAre to Net Income and a reconciliation of the non-GAAP financial measure Adjusted FFO available to common shareholders to Net Income, see “Calculation of GAAP Margin Figures,” “Non-GAAP Financial Measures,” “Adjusted EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest Definition,” “Adjusted EBITDAre, Excluding Noncontrolling Interest Margin Definition,” “Adjusted FFO available to common shareholders Definition” and “Supplemental Financial Results” below.

(1)  Excludes Gaylord Rockies, which opened in December 2018. Includes approximately 15,700 room nights out of service during first quarter 2019 related to Gaylord Opryland rooms renovation project.
(2)  "ITYFTY" represents In The Year For The Year.

Note: For the Company’s definitions of Revenue Per Available Room (RevPAR) and Total Revenue Per Available Room (Total RevPAR), see “Calculation of RevPAR, Other RevPAR, and Total RevPAR” below.  Property-level results and operating metrics for first quarter 2019 are presented in greater detail below and under “Supplemental Financial Results—Hospitality Segment Adjusted EBITDAre Reconciliations and Operating Metrics,” which includes a reconciliation of the non-GAAP financial measures Hospitality Adjusted EBITDAre to Hospitality Operating Income, and property-level Adjusted EBITDAre to property-level Operating Income for each of the hotel properties.

Gaylord Opryland Highlights for First Quarter 2019 (As Compared to First Quarter 2018):

• Total revenue for the quarter increased 7.5% to $89.0 million, driven by a mix shift toward Corporate room nights and strong food and beverage performance. The addition of the indoor portion of SoundWaves to the Gaylord Opryland experience helped drive Transient room nights, which increased approximately 23% in first quarter 2019.  The increase in Transient room nights also helped drive the 190 basis points increase in occupancy and led to a 3.3% increase in RevPAR.
• Operating income and Adjusted EBITDAre increased by 9.9% and 5.9%, respectively. The mix shift toward additional Corporate room nights in the quarter translated into higher outside the room spend in food and beverage, with both banquets and outlets delivering strong results.  Results in first quarter 2019 were negatively impacted by a non-recurring business tax adjustment, which totaled close to $1 million.
• The indoor portion of SoundWaves, an indoor/outdoor water amenity at the property, exceeded our expectations selling over 39,000 admissions during the first full quarter of its operation. Completion of the outdoor portion of the facility is scheduled for mid-May.
• The hotel is currently undergoing a planned renovation of the Magnolia wing of the hotel.  The Magnolia rooms renovation project, which began late in the fourth quarter of 2018, resulted in approximately 15,700 rooms nights out of service during first quarter 2019.  The renovation project is anticipated to be completed in fourth quarter 2019 and is currently on time and on budget.

Gaylord Palms Highlights for First Quarter 2019 (As Compared to First Quarter 2018):

• Total revenue increased 3.5% to $59.9 million, driven largely by increased revenue from catering and banquets as well as a 1.3% increase in average daily rate (“ADR”). Overall food and beverage revenue increased by 4.0% as the shift in mix toward higher-rated Association room nights helped drive higher outside the room spend.
• Despite weakness in Transient customers in the broader Orlando market, RevPAR still increased 1.8%, and Total RevPAR increased 3.5%.
• Occupancy increased by 50 basis points as the Gaylord Palms offset the overall soft Transient demand in the broader Orlando market through increased group demand. Association room nights increased 19.2%, and rate for this group segment rose by 19.3%, driving overall increased performance in ADR, RevPAR and Total RevPAR.
• Phase I of the Gaylord Palms expansion is expected to be complete by the end of May 2019 as we complete the final steps toward finishing the parking structure. Groundbreaking for the rooms and meeting place expansion will take place in second quarter 2019, and the project is expected to open in spring 2021.

Gaylord Texan Highlights for First Quarter 2019 (As Compared to First Quarter 2018):

• Total revenue increased 23.4% to $72.0 million, driven by an increase of over 23,000-room nights sold primarily due to the expansion that was completed in May 2018.  The additional rooms and meeting space enabled the property to host more groups during the quarter. Group room nights sold increased by 21.3% and accounted for approximately 18,800 additional room nights sold.
• Occupancy increased by 140 basis points, despite the additional room inventory during the quarter due to the expansion project which increased total room nights available by 20.1%.
• Led by strength in group demand, food and beverage revenue increased by 21.1%.  RevPAR and Total RevPAR results benefitted from this strength in group demand and increased by 3.5% and 2.8%, respectively.
• Operating income and Adjusted EBITDAre increased by 59.3% and 40.7%, respectively, as the higher room nights, strong outside the room spend, and labor efficiencies helped drive these results in the quarter.  In addition, operating income benefited from the absence of approximately $1.4 million in one-time pre-opening expenses incurred in first quarter 2018 related to the expansion.

Gaylord National Highlights for First Quarter 2019 (As Compared to First Quarter 2018):

• Total revenue for first quarter 2019 increased 8.0% to $65.6 million, driven by a strong performance on almost every metric, resulting in one of the best quarters for this property since its 2008 opening.  A shift in customer mix toward premium Association groups, which increased by 24.7%, and away from lower rated Transient customers helped drive an increase of 10.2% in ADR.  RevPAR and Total RevPAR increased by 12.0% and 8.0%, respectively, as the higher group focus helped increase ADR, occupancy and outside-the-room spend.
• The strategic decision to shift focus away from lower rated casino customers to Transient customers that value the resort experience offered by our resort hotel led to a 17.6% increase in Transient ADR in the quarter but resulted in a 13.7% decrease in Transient room nights sold during the first quarter 2019.
• Operating income increased 87.9% to $6.2 million, while Adjusted EBITDAre increased 23.0% to $15.8 million.  In addition to the solid room revenue performance and positive contribution from food and beverage, increases in attrition and cancellation fees, higher resort fees and other ancillary revenues contributed over $1 million to Operating Income and Adjusted EBITDAre in first quarter 2019.

(1)  Gaylord Rockies opened in December 2018, therefore there are no comparison figures. First quarter 2019 represents first full period of operations for the hotel.

(2) Operating loss and Adjusted EBITDAre for 2019 for Gaylord Rockies exclude asset management fees paid to RHP of $470,000.

Reed continued, “We are delighted by the first full quarter of results at Gaylord Rockies, which exceeded our internal plan for first quarter 2019 in nearly all key metrics. In early March, we held a Grand Opening celebration that was well received, notably from the over 200 meeting planners in attendance. The feedback so far has been tremendous, and we remain excited about this westward expansion of the Gaylord Hotels brand.

The strength of our performance in first quarter 2019 was seen across the entire portfolio; however, Gaylord National’s results were particularly noteworthy given the obstacles that market has faced in recent years.  We continue to believe that our unique business model and our willingness to invest in high return capital projects, such as the Gaylord Texan expansion, SoundWaves, and increasing our ownership in Gaylord Rockies,  has set us up well for the future and allowed us to differentiate ourselves among our hospitality peers.”

Entertainment Segment

For the three months ended March 31, 2019 and 2018, the Company reported the following:

Reed continued, “We are pleased with the strong performance we saw at our core Nashville-based Entertainment businesses this quarter as Music City continues to see increased prominence as a major entertainment destination. Behind the scenes, we spent the first quarter of the year finalizing our plans to announce our joint venture with Gray Television to create and distribute a linear multicast and premium OTT (over-the-top) channel dedicated to the country music lifestyle.  We believe this partnership is a unique opportunity to expand our position as the leader in country music lifestyle entertainment and to expand the medium in which the 110 million country music fans in the United States can experience our iconic stages.”

Corporate and Other Segment

For the three months ended March 31, 2019 and 2018, the Company reported the following:

Corporate and Other Segment Operating Loss and Adjusted EBITDAre for first quarter 2019 includes increases in administrative and employment costs associated with supporting the Company’s growth initiatives in its Hospitality and Entertainment segments. 

Dividend Update
The Company paid its first quarter 2019 cash dividend of $0.90 per share of common stock on April 15, 2019 to stockholders of record on March 29, 2019.  It is the Company’s current plan to distribute total 2019 annual dividends of approximately $3.60 per share in cash in equal quarterly payments with the remaining payments occurring in July and October of 2019 and January of 2020.  Any future dividend is subject to the Board of Director’s determinations as to the amount of quarterly distributions and the timing thereof. 

Balance Sheet/Liquidity Update
As of March 31, 2019, the Company had total debt outstanding of $2,485.2 million, net of unamortized deferred financing costs, and unrestricted cash of $94.9 million. Total debt outstanding includes full consolidation of $525.7 million of Gaylord Rockies joint venture debt, net of unamortized deferred financing costs.  As of March 31, 2019, $535.0 million of borrowings were drawn under the revolving credit line of the Company’s credit facility, and the lending banks had issued $2.2 million in letters of credit, which left $162.8 million of availability for borrowing under the credit facility.

Guidance
The Company is updating its outlook for 2019 based on current information as of May 7, 2019. The Company does not expect to update the guidance provided below before next quarter’s earnings release. However, the Company may update its full business outlook or any portion thereof at any time for any reason.

1. Same-Store Hospitality segment guidance excludes Gaylord Rockies results and assumes approximately 32,000 room nights out of service in 2019 due to the renovation of rooms at Gaylord Opryland.  The out of service rooms are included in the total available room count for calculating hotel metrics (e.g., RevPAR and Total RevPAR).
2. Includes fully consolidated results from Gaylord Rockies. The Company owns 61.2% and is the managing member of the joint venture that owns Gaylord Rockies.
3. Excludes ownership of Gaylord Rockies joint venture not controlled or owned by the Company.

Note: For reconciliations of Adjusted EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest to Net Income and reconciliation of FFO available to common shareholders, and Adjusted FFO available to common shareholders guidance to Net Income available to common shareholders and reconciliations of segment Adjusted EBITDAre guidance to segment Operating Income, see “Reconciliations of Forward-Looking Statements,” below.

Reed concluded, “We entered 2019 with great anticipation given the strength of the group market and the number of capital projects we put into service during 2018. With the benefit of a full quarter of performance now in the books, we have decided to update our full year guidance. We feel this updated guidance outlook better illustrates the positive response we are seeing from our customers to the investments we have made in our Hospitality business as we continue to capitalize on the strength of group demand. Similarly, on the Entertainment side of our business, we continue to see strong growth in both our core and developing brands, which we believe will continue to improve as we enter the summer tourism season. Moreover, we believe the recently-announced joint venture with Gray Television will modestly impact our full year 2019 guidance range for Adjusted EBITDAre for the Entertainment segment and full year 2019 Adjusted FFO available to common shareholders. This year is off to a great start, and we believe we are in a favorable position for the months and years to come.”

Earnings Call Information

Ryman Hospitality Properties will hold a conference call to discuss this release today at 11 a.m. ET. Investors can listen to the conference call over the Internet at www.rymanhp.com. To listen to the live call, please go to the Investor Relations section of the website (Investor Relations/Presentations, Earnings and Webcasts) at least 15 minutes prior to the call to register and download any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call and will be available for at least 30 days.

About Ryman Hospitality Properties, Inc.

Ryman Hospitality Properties, Inc. (NYSE: RHP) is a REIT for federal income tax purposes, specializing in group-oriented, destination hotel assets in urban and resort markets. The Company’s owned assets include a network of four upscale, meetings-focused resorts totaling 8,114 rooms that are managed by lodging operator Marriott International, Inc. under the Gaylord Hotels brand. The Company is a joint venture owner of the 1,501-room Gaylord Rockies Resort & Convention Center, which is also managed by Marriott International, Inc. under the Gaylord Hotels brand. Other owned assets managed by Marriott International, Inc. include Gaylord Springs Golf Links, the Wildhorse Saloon, the General Jackson Showboat, The Inn at Opryland, a 303-room overflow hotel adjacent to Gaylord Opryland and AC Hotel Washington, DC at National Harbor, a 192-room hotel near Gaylord National. The Company also owns and operates media and entertainment assets, including the Grand Ole Opry (opry.com), the legendary weekly showcase of country music’s finest performers for over 90 years; the Ryman Auditorium, the storied former home of the Grand Ole Opry located in downtown Nashville; 650 AM WSM, the Opry’s radio home; and Ole Red, a country lifestyle and entertainment brand. For additional information about Ryman Hospitality Properties, visit www.rymanhp.com.

Cautionary Note Regarding Forward-Looking Statements
This press release contains statements as to the Company’s beliefs and expectations of the outcome of future events that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Examples of these statements include, but are not limited to, statements regarding the future performance of our business, estimated capital expenditures, new projects or investments, out-of-service rooms, the expected approach to making dividend payments, the board’s ability to alter the dividend policy at any time and other business or operational issues. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made. These include the risks and uncertainties associated with economic conditions affecting the hospitality business generally, the geographic concentration of the Company’s hotel properties, business levels at the Company’s hotels, the Company’s ability to remain qualified as a REIT for federal income tax purposes, the Company’s ability to execute its strategic goals as a REIT, the Company’s ability to generate cash flows to support dividends, future board determinations regarding the timing and amount of dividends and changes to the dividend policy, which could be made at any time, the determination of Adjusted FFO available to common shareholders and REIT taxable income, and the Company’s ability to borrow funds pursuant to its credit agreement. Other factors that could cause operating and financial results to differ are described in the filings made from time to time by the Company with the U.S. Securities and Exchange Commission (SEC) and include the risk factors and other risks and uncertainties described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and its Quarterly Reports on Form 10-Q and subsequent filings. The Company does not undertake any obligation to release publicly any revisions to forward-looking statements made by it to reflect events or circumstances occurring after the date hereof or the occurrence of unanticipated events.

Additional Information
This release should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent annual report on Form 10-K. Copies of our reports are available on our website at no expense at www.rymanhp.com and through the SEC’s Electronic Data Gathering Analysis and Retrieval System (“EDGAR”) at www.sec.gov.

Calculation of RevPAR, Other RevPAR, and Total RevPAR
We calculate revenue per available room (“RevPAR”) for our hotels by dividing room revenue by room nights available to guests for the period. We calculate other revenue per available room (“Other RevPAR”) for our hotels by dividing all non-room revenue (food & beverage and other ancillary services revenue) by room nights available to guests for the period. We calculate total revenue per available room (“Total RevPAR”) for our hotels by dividing the sum of room revenue, food & beverage and other ancillary services revenue by room nights available to guests for the period. Rooms out of service for renovation are included in room nights available.  Same-Store Hospitality RevPAR and Same-Store Hospitality Total RevPAR do not include the Gaylord Rockies.

Calculation of GAAP Margin Figures
We calculate Net Income available to common shareholders margin by dividing GAAP consolidated Net Income available to common shareholders by GAAP consolidated Total Revenue. We calculate consolidated, segment or property-level Operating Income Margin by dividing consolidated, segment or property-level GAAP Operating Income by consolidated, segment or property-level GAAP Revenue. Same-Store Operating Income Margin and Adjusted EBITDAre Margin do not include the Gaylord Rockies.

Non-GAAP Financial Measures
We present the following non-GAAP financial measures we believe are useful to investors as key measures of our operating performance:

Adjusted EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest Definition
We calculate EBITDAre, which is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) in its September 2017 white paper as net income (calculated in accordance with GAAP) plus interest expense, income tax expense, depreciation and amortization, gains or losses on the disposition of depreciated property (including gains or losses on change in control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in the value of depreciated property or the affiliate, and adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. Adjusted EBITDAre is then calculated as EBITDAre, plus to the extent the following adjustments occurred during the periods presented: preopening costs; non-cash ground lease expense; equity-based compensation expense; impairment charges that do not meet the NAREIT definition above; any transaction costs of completed acquisitions; interest income on bonds; pension settlement charges; pro rata Adjusted EBITDAre from unconsolidated joint ventures, and any other adjustments we have identified in this release. We then exclude noncontrolling interests in joint ventures to calculate Adjusted EBITDAre, Excluding Noncontrolling Interest. We make additional adjustments to EBITDAre when evaluating our performance because we believe that presenting Adjusted EBITDAre, Adjusted EBITDAre, Excluding Noncontrolling Interest, and adjustments for certain additional items provide useful information to investors regarding our operating performance and debt leverage metrics, and that the presentation of Adjusted EBITDAre and Adjusted EBITDAre, Excluding Noncontrolling Interest, when combined with the primary GAAP presentation of net income, is beneficial to an investor’s complete understanding of our operating performance. Same-Store Hospitality Adjusted EBITDAre does not include the Gaylord Rockies.

Adjusted EBITDAre, Excluding Noncontrolling Interest Margin Definition
We calculate consolidated Adjusted EBITDAre, Excluding Noncontrolling Interest Margin by dividing consolidated Adjusted EBITDAre, Excluding Noncontrolling Interest by GAAP consolidated Total Revenue. We calculate consolidated, segment, or property-level Adjusted EBITDAre Margin by dividing segment, or property-level Adjusted EBITDAre by consolidated, segment, or property-level GAAP Revenue.  We believe Adjusted EBITDAre, Excluding Noncontrolling Interest Margin is useful to investors in evaluating our operating performance because this non-GAAP financial measure helps investors evaluate and compare the results of our operations from period to period by presenting a ratio showing the quantitative relationship between Adjusted EBITDAre, Excluding Noncontrolling Interest and GAAP consolidated Total Revenue or segment or property-level GAAP Revenue, as applicable.

Adjusted FFO available to common shareholders Definition
We calculate FFO, which definition is clarified by NAREIT in its December 2018 white paper as net income (calculated in accordance with GAAP) excluding depreciation and amortization (excluding amortization of deferred financing costs and debt discounts), gains and losses from the sale of certain real estate assets, gains and losses from a change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciated real estate held by the entity, income (loss) from consolidated joint ventures attributable to noncontrolling interest, and pro rata adjustments for unconsolidated joint ventures. The clarifications did not change our calculation of FFO available to common shareholders and Adjusted FFO available to common shareholders for any historical period.  To calculate Adjusted FFO available to common shareholders, we then exclude, to the extent the following adjustments occurred during the periods presented, impairment charges that do not meet the NAREIT definition above; write-offs of deferred financing costs, non-cash ground lease expense, amortization of debt discounts and amortization of deferred financing cost, pension settlement charges, additional pro rata adjustments from joint ventures, (gains) losses on other assets, transaction costs on completed acquisitions, deferred income tax expense (benefit), and (gains) losses on extinguishment of debt. FFO available to common shareholders and Adjusted FFO available to common shareholders (presented for 2019) exclude the ownership portion of Gaylord Rockies joint venture not controlled or owned by the Company.

We believe that the presentation of FFO available to common shareholders and Adjusted FFO available to common shareholders provide useful information to investors regarding the performance of our ongoing operations because it is a measure of our operations without regard to specified non-cash items such as real estate depreciation and amortization, gain or loss on sale of assets and certain other items which we believe are not indicative of the performance of our underlying hotel properties. We believe that these items are more representative of our asset base than our ongoing operations. We also use FFO available to common shareholders and Adjusted FFO available to common shareholders as measures in determining our results after considering the impact of our capital structure. A reconciliation of Net Income (loss) to FFO available to common shareholders and a reconciliation of Net Income (loss) available to common shareholders to Adjusted FFO available to common shareholders are set forth below under “Supplemental Financial Results.”  

We caution investors that amounts presented in accordance with our definitions of Adjusted EBITDAre, Adjusted EBITDAre, Excluding Noncontrolling Interest, Adjusted EBITDAre, Excluding Noncontrolling Interest Margin, and Adjusted FFO available to common shareholders may not be comparable to similar measures disclosed by other companies, because not all companies calculate these non-GAAP measures in the same manner. Adjusted EBITDAre, Adjusted EBITDAre, Excluding Noncontrolling Interest, Adjusted EBITDAre, Excluding Noncontrolling Interest Margin, and Adjusted FFO available to common shareholders, and any related per share measures, should not be considered as alternative measures of our Net Income (loss), operating performance, cash flow or liquidity. Adjusted EBITDAre, Adjusted EBITDAre, Excluding Noncontrolling Interest, and Adjusted FFO available to common shareholders may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions and other commitments and uncertainties. Although we believe that Adjusted EBITDAre, Adjusted EBITDAre, Excluding Noncontrolling Interest, Adjusted EBITDAre, Excluding Noncontrolling Interest Margin, and Adjusted FFO available to common shareholders can enhance an investor’s understanding of our results of operations, these non-GAAP financial measures, when viewed individually, are not necessarily better indicators of any trend as compared to GAAP measures such as Net Income (loss), Net Income Margin, Operating Income (loss), Operating Income Margin, or cash flow from operations. In addition, you should be aware that adverse economic and market and other conditions may harm our cash flow.  

(1) Same-Store Hospitality segment excludes Gaylord Rockies, which opened in December 2018.

(1) Represents FF&E reserve for managed properties and maintenance capital expenditures for non-managed properties.