Chicago, August 8, 2012 - Orbitz Worldwide, Inc. (NYSE: OWW) today announced results for the second quarter and six months ended June 30, 2012.
“Despite a challenging economic environment in Europe in particular, we grew room nights 3%, consistent with the first quarter, led by 28% growth at ebookers. Our U.S. distribution business grew room nights 19%,ahead of the planned launch of our American Express Consumer Travel Network partnership in the third quarter. Our outlook for the third quarter and balance of the year is impacted by the global economic uncertainty that intensified during the second quarter and has continued into the third quarter,” said Barney Harford, CEO, Orbitz Worldwide. “We continue to see very strong growth in mobile as we deliver new mobile apps and services across our global brands. Mobile, defined broadly to include smartphones and tablets,now represents 20% of Orbitz.com standalone hotel transactions.”
Second Quarter 2012 Financial Highlights
The company reported net income of $4.6 million or $0.04 per diluted share for the second quarter 2012 compared with net income of $8.9 million or $0.08 per diluted share for the second quarter 2011. Adjusted EBITDA was $32.1 million for the second quarter 2012.
Gross Bookings and Net Revenue
Gross bookings declined one percent year over year at reported rates. On a constant currency basis, gross bookings were up one percent in the quarter primarily driven by higher vacation package and hotel volume, higher air fares and a shift in air carrier mix, partially offset by lower air volume.
Net revenue was $201.0 million for the second quarter 2012, relatively flat year over year. On a constant currency basis, net revenue was up two percent in the quarter due primarily to higher vacation package and hotel volume, higher net revenue per airline ticket and higher advertising revenue, partially offset by lower air volume and lower revenue from travel insurance and hosting. Hotel net revenue, including hotels booked on a standalone basis and as part of a vacation package, represented 38 percent of the company's total net revenue for the trailing twelve months ended June 30, 2012, up from 36 percent for the trailing twelve months ended June 30, 2011.
Standalone air net revenue was $67.3 million in the second quarter 2012, down three percent year over year. This decline was driven primarily by lower domestic air volume, partially offset by higher net revenue per airline ticket and higher air volume at ebookers. Standalone hotel net revenue was $55.9 million in the second quarter 2012, up one percent year over year. This increase was driven primarily by higher hotel volume for the company's domestic leisurebusiness and ebookers, partially offset by lower volume at HotelClub.
• Vacation package net revenue increased nine percent in the quarter to $36.4 million due primarily to higher volume for both the company's domestic leisure business and ebookers. Advertising and media revenue increased 12 percent year over year in the second quarter to $15.3 million.
Other net revenue, which is comprised primarily of car rental, cruise, destination services, travel insurance and airline hosting revenue, declined 13 percent year over year. This decline was driven primarily by a new Department of Transportation regulation that went into effect January 2012, which no longer allows travel insurance to be pre-selected on the company's domestic websites. This change reduced travel insurance attachment rates. The termination of the company's remaining airline hosting agreement in July 2011 also contributed to the decline. In order to provide a more comparable view of the company's operating performance across periods,
Operational Highlights
Consumer Brands
• Orbitz Worldwide continued to invest in mobile commerce through new product offerings and enhancements to its existing mobile products:
In June 2012, Orbitz.com re-launched the popular Orbitz Flights, Hotels, Cars for iPhone app,adding major speed improvements, powerful sort and filtering capabilities and new mapping tools that better highlight exclusive, mobile-only hotel discounts.
The completely rebuilt Orbitz app is the only fully native, streamlined in-app search and book experience for flights, hotel rooms and car rentals. A consumer usability study found the newly updated Orbitz Flights, Hotels, Cars for iPhone app to be the fastest and easiest way to search and book an entire trip among leading travel apps, mobile websites and desktop sites tested. From June 21st to June 27th, Apple featured this highly rated app as an Editors' Choice selection in the App Store.
Orbitz Worldwide released the first Android app for its ebookers, HotelClub, RatesToGo and CheapTickets brands. In addition, the company launched a completely redesigned Orbitz Android app powered by the global platform. All Orbitz Worldwide consumer brands now have apps for the important Android platform, providing a great way to attract new customers as well as increase loyalty among existing Android customers.
• In May 2012, Orbitz.com launched a new ad campaign to spark a movement among Americans to "Take Vacation Back." Orbitz.com also introduced a refreshed website that brings to life the tenets of the new campaign through a more colorful and vibrant look and feel. The site debuted an enhanced Orbitz.com logo with a rich color palate, plus a sleek, fresh and lively design that draws users in and puts the most useful travel tools and content front and center for consumers.
Partner Services
• During the second quarter 2012, Orbitz Worldwide signed new multi-year agreements with Fairmont Hotels & Resorts and the Louvre Hotels Group, including the Golden Tulip Group, as well as partnership agreements with a number of regional hotel groups including Accor's Adagio brand hotels in Europe, Paramount Hotels in the United Kingdom, Servi Group and Protur in Spain and Tauzia Hotel Management in Indonesia, among others. At June 30, 2012, Orbitz Worldwide websites featured over 100,000 bookable hotel properties.
• During the second quarter 2012, Orbitz Worldwide signed new distribution agreements with Hong Kong Airlines, Malaysia Airlines, Emirates and Aerolineas Argentinas, among others, giving Orbitz.com, CheapTickets and Orbitz for Business customers access to their fares, schedules and inventory.
• During the second quarter 2012, ebookers launched its partnership with travel content aggregator Travelfusion, providing ebookers.com access to additional low cost carrier content.
• During the second quarter 2012, Orbitz Worldwide signed partner marketing contracts with a number of destination marketing organizations including The Outer Banks Tourism, Visit Denver, Corpus Christi Convention and Visitors Bureau, Bermuda Tourism, Edmonton Tourism, Memphis Convention and Visitors Bureau, New York State Tourism, Greater Miami Convention and Visitors Bureau, Puerto Rico
Tourism Company, Tourism Queensland, Visit Baltimore and Arkansas Tourism.
Outlook
For the third quarter 2012, the company expects:
• Net revenue in the range of $197 million to $203 million; and
• Adjusted EBITDA between $32 million and $38 million.
For the full year 2012, the company expects:
• Net revenue up between two percent and four percent year over year; and
• Adjusted EBITDA between flat and up five percent year over year.
