Sabre reports third quarter 2015 results
SOUTHLAKE, Texas, Oct. 29, 2015 /PRNewswire/ -- Sabre Corporation (NASDAQ: SABR) today announced financial results for the quarter ended September 30, 2015.
"In the third quarter we delivered strong financial results while doing great work to integrate Abacus. Sabre's expanding global footprint, strong customer bookings growth and new product innovation are key to driving our performance," said Tom Klein, Sabre president and CEO. "Travel Network revenue increased 22.1% in the quarter. Our new, wholly-owned Asia-Pacific business was a big factor, underpinned with continuing strong booking growth of 6.3% in North America and 15.5% in EMEA. In Airline and Hospitality Solutions, revenue and Adjusted EBITDA increased 4.9% and 4.4%, respectively. Our third quarter results keep us on track to deliver on our full-year objectives."
Q3 2015 Financial Summary
Sabre consolidated third quarter revenue increased 16.7% to $785.0 million, compared to $672.5 million for the same period last year.
Income from continuing operations totaled $123.1 million, compared to $41.2 million in the third quarter of 2014. The increase in income from continuing operations includes gains totaling $97.7 million related to the acquisition of Abacus. Consolidated Adjusted EBITDA was $241.7 million, a 12.1% increase from $215.5 million in the prior year third quarter. The increase in consolidated Adjusted EBITDA is the result of Adjusted EBITDA increases of 19.3% in Travel Network and 4.4% in Airline and Hospitality Solutions, respectively.
For the quarter, Sabre reported income from continuing operations of $0.44 per share. Adjusted net income from continuing operations (Adjusted EPS) increased 26.1% to $0.29 per share.
Cash flow from operations totaled $121.7 million, compared to $81.1 million in the third quarter of 2014. Third quarter Free Cash Flow was $46.6 million, compared to $33.3 million in the year ago period. Capital expenditures totaled $75.1 million, compared to $47.7 million in the year ago period. Adjusted Capital Expenditures, which include capitalized implementation costs, totaled $95.2 million, compared to $57.2 millionin the third quarter of 2014.
Sabre Airline and Hospitality Solutions
Third quarter 2015 Airline and Hospitality Solutions revenue increased 4.9% to $219.0 million from $208.7 million in the prior year period. Contributing to the rise in revenue was a 4.0% increase in airline passengers boarded through the SabreSonic reservation solution and continued momentum in Sabre Hospitality Solutions, including the implementation of Sabre Hospitality Solutions products at more than 600 incremental properties.
Sabre Airline and Hospitality Solutions Adjusted EBITDA increased 4.4% to $85.3 million from $81.7 million in the prior year period. Third quarter Adjusted EBITDA margin was 38.9%, compared to 39.1% for the prior year quarter.
Subsequent to the third quarter, Sabre worked with American Airlines to complete the largest technology integration in the airline industry's history, making American Airlines the largest customer in the SabreSonic community.
Sabre Travel Network
On July 1, Sabre completed the acquisition of Abacus International, the leading global distribution system (GDS) in the Asia-Pacific region. Sabre previously owned 35% of Abacus. As the largest and fastest growing region in the travel industry, Asia-Pacific is a platform for investment and growth. Concurrent with the completion of the Abacus acquisition, Sabre signed long-term distribution agreements with the 11 Asian airlines that sold their 65% share in Abacus to Sabre.
Third quarter Travel Network revenue increased 22.1% to $569.2 million, compared to $466.3 million for the same period in 2014. Total bookings increased 29.5% driven by Sabre's now wholly-owned Asia-Pacificbusiness and strong growth in all regions except Latin America. Excluding the Abacus acquisition, global bookings increased 6.5% in the quarter. Bookings growth in North America was 6.3% in the quarter. EMEA continues to be Sabre Travel Network's fastest growing region, with an increase of 15.5% year over year, while bookings in Latin America declined 3.9%. Third quarter 2015 Travel Network Adjusted EBITDA increased 19.3% to $231.2 million.
Business Outlook and Financial Guidance
Reflecting strong year-to-date results and continued momentum, Sabre narrowed full-year revenue, Adjusted EBITDA, Adjusted net income and Adjusted EPS guidance.
Sabre expects full-year revenue of between $2.955 billion and $2.975 billion. 2015 Adjusted EBITDA is expected to be between $935 million and $943 million.
In Airline and Hospitality Solutions, Sabre continues to expect 2015 revenue growth toward the higher end of its 9% to 11% range. Full-year passengers boarded are expected to increase at or above 10% in 2015, including the added volume from American Airlines.
In Travel Network, Sabre continues to expect 2015 revenue growth of 13% or more, with full-year bookings growth of approximately 17%.
Sabre's full-year Adjusted net income is expected to be between $293 million to $303 million, and Adjusted EPS is forecast to be in a range of $1.06 to $1.10. Free Cash Flow and Adjusted Free Cash Flow are expected to be $240 million and more than $290 million, respectively.