Sabre Corporation Reports Third Quarter 2014 Results
SOUTHLAKE, Texas, Nov. 11, 2014 /PRNewswire/ -- Sabre Corporation (NASDAQ: SABR) today announced financial resultsfor the quarter ended September 30, 2014.
"Third quarter results demonstrate continued progress toward our financial and strategic objectives," said Tom Klein, SabrePresident and CEO. "Accelerated bookings growth, combined with sales, implementation, and innovation momentum drovesolid revenue and Adjusted EBITDA growth in our Airline and Hospitality Solutions and Travel Network businesses. We reiterateour Adjusted EBITDA and EPS guidance and are well positioned as we approach 2015."
Q3 2014 Financial Summary
Airline and Hospitality Solutions revenue increased 14.3% to $209 million from $183 million in the third quarter of 2013. Theincrease was driven by a combination of growth in passengers boarded through Sabre Airline Solutions SabreSonic CSSsolution, which increased 7.9% in the quarter, and continued strong performance across the Airline Solutions' Commercial andOperations portfolio and Sabre Hospitality Solutions. As a result of strengthened bookings growth of 3.1%, Travel Networkrevenue increased 3.7% to $466 million from $450 million for the same period of 2013.
Sabre reported total consolidated third quarter revenue of $756 million, compared to $776 million for the prior year quarter.Consolidated Adjusted revenue for the quarter ended September 30, 2014, was $759 million a decline of 2.1% from $776million for the third quarter of 2013. Excluding Travelocity, revenue increased 9.0% from $615 million in the third quarter of2013 to $670 million in the third quarter of 2014.
Consolidated net income for the third quarter 2014 totaled $37 million, compared to $5 million in the previous year quarter.Third quarter consolidated Adjusted EBITDA was $230 million, a 14.2% increase from $201 million in the prior year period.Sabre Airline and Hospitality Solutions Adjusted EBITDA increased 43.4% from the year ago quarter to $82 million for the thirdquarter of 2014. Third quarter 2014 Travel Network Adjusted EBITDA increased 5.5% to $194 million. Excluding Travelocity,Adjusted EBITDA increased 10.3% from $194 million in the third quarter of the prior year to $214 million for the third quarter of2014.
For the third quarter of 2014, Sabre reported income from continuing operations of $0.14 per share. Sabre reported thirdquarter 2014 Adjusted Net Income from Continuing Operations (Adjusted EPS) of $0.26 per share.
Cash Flow from Operations totaled $44 million for the third quarter of 2014, compared to $81 million in the third quarter of2013. Adjusted Free Cash Flow totaled $73 million in the third quarter of 2014, a 37.1% increase from $53 million in the thirdquarter of 2013. Adjusted Free Cash Flow excludes the effect of the change in the business model at Travelocity, includingrelated restructuring costs and the effect on working capital, as well as the impacts of dispositions, litigation and other costs(see reconciliation below). Adjusted Capital Expenditures, which includes capitalized implementation costs, totaled $60 millionfor the third quarter of 2014, compared to $67 million in the year-ago period.
Sabre Airline and Hospitality Solutions
Growth across the customer base led to a 14.3% increase in revenue to $209 million in the third quarter of 2014, compared to$183 million in the prior year quarter. This revenue growth was driven in part by an increase in passengers boarded throughthe SabreSonic® airline reservation system. Total passengers boarded were 137 million, a 7.9% increase from 127 million inthe third quarter of 2013. Solid revenue contributions from our commercial and operations solutions and Hospitality Solutionsalso contributed to the revenue growth in the quarter.
Continued revenue growth and operating leverage across the SaaS and hosted solutions resulted in a 43.4% increase inAirline and Hospitality Solutions Adjusted EBITDA to $82 million for the third quarter of 2014 versus $57 million for the prioryear period.
Sabre Travel Network
For the third quarter, Travel Network revenue increased $17 million, or 3.7%, to $466 million. Direct billable bookings of 95million increased 3.1% versus the prior year quarter, driven by growth in all regions partially offset by the decline in air travel inVenezuela.
Travel Network third quarter Adjusted EBITDA of $194 million increased 5.5% from $184 million for the third quarter of 2013.
Third quarter 2014 Travelocity results reflect the effects of the full migration to the new business model. As a result, thirdquarter 2014 Travelocity Adjusted Revenue declined 44.7% to $89 million, compared to $161 million in the third quarter of2013, while Adjusted EBITDA increased 116% to $16 million, compared to earnings of $7 million in the third quarter of 2013.The company expects continued solid profitability for Travelocity going forward.