Chicago, May 3, 2012 - Orbitz Worldwide, Inc. (NYSE: OWW) today announced results for the first quarter ended March 31, 2012.
• Room night growth accelerated by 5 percentage points, driven by acceleration within the U.S. consumer business and 33 percent growth at ebookers.
• Adjusted EBITDA grew 19 percent to $20.6 million, driven by revenue growth and Adjusted EBITDA margin expansion.
• Operating cash flow grew 10 percent to $98.8 million, driven by growth in the global hotel business.
First Quarter 2012 Financial Highlights
The company reported a net loss of $6.5 million or $0.06 per diluted share for the first quarter 2012 compared with a net loss of $10.9 million or $0.11 per diluted share for the first quarter 2011. Adjusted EBITDA was $20.6 million for the first quarter 2012, an increase of 19 percent year over year.
Gross Bookings and Net Revenue
Gross bookings grew six percent year over year. The increase in gross bookings was driven primarily by hotel and vacation package volume, higher average daily rates ("ADRs") for hotel rooms, higher air fares and a shift in air carrier mix. Total hotel gross bookings, including hotels booked on a standalone basis and as part of a vacation package, increased 12 percent year over year due to higher volume and, to a lesser extent, ADR expansion.
Net revenue was $189.8 million for the first quarter 2012, up three percent year over year. Net revenue increased due primarily to higher hotel and vacation package revenue, partially offset by lower advertising and media revenue and lower travel insurance revenue. Hotel net revenue, including hotels booked on a standalone basis and as part of a vacation package, represented 37 percent of the company's total net revenue for the trailing twelve months ended March 31, 2012, up from 36 percent for the year ended December 31, 2011.
• Standalone air net revenue was $72.2 million in the first quarter 2012, relatively flat year over year. Domestically, lower air volume was largely offset by higher net revenue per airline ticket. At ebookers, higher air volume was offset by lower net revenue per airline ticket.
• Standalone hotel net revenue was $49.5 million in the first quarter 2012, up nine percent year over year. This increase was driven primarily by strength in hotel volume at the company's domestic leisure business and ebookers as well as higher ADRs, partially offset by weakness at HotelClub.
• Vacation package net revenue increased 17 percent in the quarter to $30.3 million. Vacation package net revenue for the company's domestic leisure business increased due primarily to higher volume, ADRs and breakage revenue. ebookers vacation package net revenue increased due to higher volume as a result of the company's on-going strategic focus on vacation package destinations.
• Advertising and media revenue declined ten percent year over year in the first quarter to $11.5 million due primarily to lower display revenue.
• Other net revenue, which is comprised primarily of car rental, cruise, destination services, travel insurance and airline hosting revenue, declined eight percent year over year. This decline was driven primarily by a new regulation issued by the Department of Transportation effective January 2012 that no longer allows for the travel insurance option to be pre-selected, which reduced attachment rates for travel insurance on the company's domestic websites. The termination of the company's remaining airline hosting agreement in July 2011 also contributed to the decline.
Operational Highlights
Consumer Brands
• In February 2012, Orbitz Worldwide completed a multi-year initiative to bring all of its consumer brands onto a common technology platform.
• During the first quarter 2012, Orbitz Worldwide continued to build on its success in the mobile commerce space: Orbitz Worldwide completed its effort to launch mobile-optimized websites for all of its consumer brands, with the launch of the first mobile-optimized websites for RatesToGo.com(m.ratestogo.com) and HotelClub.com (m.hotelclub.com). Following the completion of this effort, Mobile Steals/Deals are now available across all Orbitz Worldwide consumer brands. Orbitz.com launched the Hotels by Orbitz App for iPhone, a native application that gives customers an intuitive search-and-book experience designed specifically for iPhone and offers travelers powerful comparison tools, secure booking in just three taps and access to Orbitz Mobile Steals
• The number of Mobile Steals/Deals available via Orbitz Worldwide mobile websites and native applications has grown dramatically since the program launched in December 2011. Mobile exclusive hotel deals are now available across nearly 200 destinations worldwide at discounts of up to 65 percent off regular pricing.
• Orbitz Worldwide continued to grow its social media engagement with consumers, growing Orbitz.com Facebook fans by 24 percent in the U.S., ebookers Facebook fans by 99 percent in Europe, and surpassing one million verified customer hotel reviews during the first quarter 2012.
Corporate Travel
• In March 2012, Orbitz for Business announced the launch of Orbitz for Business Express to offer savings, convenience and professional travel services to small businesses with travel needs, including those currently without a managed travel program. Orbitz for Business Express offers small businesses a managed travel solution that is both flexible and affordable, including a customized booking website, special rates and discounts, 24/7 assistance from Orbitz corporate travel experts, detailed reports on company travel expenditures and access to mobile search and book functionality, all with no minimum transaction requirements.
Partner Services
• In February 2012, Orbitz Worldwide signed a new multi-year marketing and distribution agreement with United Airlines that gives Orbitz.com, CheapTickets and Orbitz for Business customers access to all United and Continental fares, schedules and inventory.
• During the first quarter 2012, Orbitz Worldwide signed an agreement with travel content aggregator Travelfusion that gives ebookers.com access to additional low cost carrier content and renewed its distribution agreement with Air Finland that gives ebookers.com customers access to exclusive fares and supply.
• In April 2012, Orbitz Worldwide signed a marketing and distribution agreement with Air Canada that gives Orbitz.com, CheapTickets and Orbitz for Business customers access to Air Canada fares, schedules and inventory.
• During the first quarter 2012, Orbitz Worldwide signed a new multi-year agreement with Omni Hotels& Resorts, as well as partnership agreements with a number of regional hotel groups including The Novum Group in Germany, The Fletcher Hotel Group in the Netherlands, Mitsis Hotels in Greece and Lagrange Residences in France.
• During the first quarter 2012, Orbitz Worldwide signed partner marketing contracts with a number of destination marketing organizations including San Antonio Convention and Visitors Bureau, Austin Convention and Visitors Bureau, Visit Orlando, Kentucky Travel and Tourism, Wyoming Tourism, Louisiana Tourism, Scandinavian Tourism Board, Tourism Montreal, Visit Norway, Embratur Brazil, Tourism Queensland and Hong Kong Tourism Board. Orbitz Worldwide has partner marketing agreements with over 225 destination marketing organizations.
• In May 2012, Orbitz Worldwide announced a new partnership with award-winning travel journalist/producer Richard Bangs to deliver an unprecedented level of integration between television and the web in the travel category. Television is the ultimate tool for inspiring people to travel to new places, and through this partnership Richard Bangs will use his "Quest Series," a new program for public television, to take viewers to visit geographic and cultural wonders of the world, while dedicated Orbitz landing pages and resources will make it easy for viewers to research and book trips to destinations featured in each episode. "South America: Quest for Wonder" will be the first episode in the new series, scheduled to air on public television this October.
Outlook
For the second quarter 2012, the company expects:
• Net revenue in the range of $205 million to $211 million; and
• Adjusted EBITDA between $31 million and $35 million.
For the full year 2012, the company expects:
• Net revenue to grow between 4 percent and 8 percent year over year; and
• Adjusted EBITDA to grow between 7 percent and 12 percent year over year.
