Chicago, February 13, 2014 - Orbitz Worldwide, Inc. (NYSE: OWW) today announced results for the fourth quarter and full year ended December 31, 2013.
• Room nights grew 15 percent year on year in the fourth quarter 2013 and 18 percent for the full year 2013.
• Revenue increased 4 percent year on year to $197.4 million in the fourth quarter 2013 and increased 9 percent to $847.0 million for the full year 2013.
• Net income increased to $165.1 million for the full year 2013 compared with a net loss of $301.7 million for the full year 2012. The year over year change in net income was driven primarily by the 2013 release in valuation allowance of $174.4 million related to the company’s deferred tax assets and a 2012 impairment charge of $321.2 million.
• Adjusted EBITDA decreased 5 percent year on year to $34.0 million in the fourth quarter 2013 and increased 12 percent to $143.6 million for the full year 2013.
“In 2013 we delivered strong performance with revenue up 9 percent, Adjusted EBITDA up 12 percent and a 15 percentage point acceleration in hotel room night growth to 18 percent. Investments in our global technology platform enabled each of our businesses to accelerate in the strategically important hotel segment while also achieving operating efficiencies,” said Barney Harford, CEO. “Looking forward to 2014 and beyond, our strategic initiatives in the areas of loyalty, mobile and international expansion position us well to deliver continued strong growth in Adjusted EBITDA as we seek to make our brands the world's most rewarding places to plan and purchase travel on touch devices.”
Fourth Quarter 2013 Financial Results
Gross Bookings and Net Revenue
Gross bookings increased 0.2 percent year on year to $2,479.2 million in the fourth quarter 2013. This increase was driven by higher hotel and vacation package transaction volumes and higher average booking values per air, hotel and vacation package transaction, offset by lower air transaction volume.
Net revenue increased 4 percent year on year to $197.4 million in the fourth quarter 2013. This increase was driven by higher hotel and vacation package transaction volumes and higher net revenue per hotel and vacation package transaction, offset by lower air transaction volume and lower net revenue per air transaction.
• Standalone hotel net revenue was $69.7 million in the fourth quarter 2013, up 18 percent year on year. This increase was driven by higher transaction volume and higher net revenue per transaction. Standalone hotel net revenue represented 35% of total fourth quarter revenue, up from 31% in the fourth quarter of 2012.
• Standalone air net revenue was $53.5 million in the fourth quarter 2013, down 11 percent year on year. This decrease was due to lower air transaction volumes and lower net revenue per transaction. Standalone air net revenue represented 27% of total fourth quarter revenue, down from 32% in the fourth quarter of 2012.
• Vacation package net revenue was $34.8 million in the fourth quarter 2013, up 16 percent year on year. This increase was driven by higher transaction volume and higher net revenue per transaction. Vacation package net revenue represented 18% of total fourth quarter revenue, up from 16% in the fourth quarter of 2012.
• Advertising and media revenue was $16.6 million in the fourth quarter 2013, down 2 percent year on year. This decrease was due to the shutdown of the Away Network, offset by growth in partner marketing. Advertising and media net revenue represented 8% of total fourth quarter revenue, down from 9% in the fourth quarter of 2012.
Operational Highlights
Consumer Brands
• In October, Orbitz.com launched its Orbitz Rewards loyalty program, which gives travelers the opportunity to earn OrbucksSM -- the currency of Orbitz Rewards -- when booking hotels, flights and vacation packages on Orbitz.com and then redeem them instantly on tens of thousands of hotels around the world, with no blackout dates, no redemption hurdles and no restrictions on combining rewards with other offers. In November, the program surpassed the one-million-member mark.
• In December, Orbitz Worldwide was ranked in the top ten of Glassdoor’s 2014 Best Places to Work, which recognizes the best places to work in the U.S. based on employee reviews. Others in the top ten included Twitter, Facebook and Google. Orbitz was the top-rated Chicago company and the top-rated company in the travel industry, receiving a 4.3 out of 5.0 rating from employees.
• In the fourth quarter of 2013, 28 percent of standalone hotel bookings were made via mobile devices across the company's global consumer brand portfolio.
• During the fourth quarter, HotelClub launched a redesigned app for iOS that also fully integrates the Member Rewards loyalty program into the app experience. This new version of the app was featured in the iTunes App Store as a “Best New App” upon launch in Australia and New Zealand.
• In January, Orbitz.com launched Orbitz Labs, labs.orbitz.com, a new site that tests experimental travel tools and features to improve the online shopping experience and lets consumers give ideas and feedback directly to the engineers developing
new products and services.
Orbitz Partner Network
• During the fourth quarter, Orbitz Worldwide signed partner marketing contracts with a number of destination marketing organizations including Canary Islands Tourism, Experience Kissimmee, Jamaica Tourism Board, Northern Ireland Tourism, San Diego Tourism Authority, South Australia Tourism, South Carolina Department of Recreation, Parks and Tourism, Squaw Valley, St. Kitts Tourism and Turismo de Portugal.
• In November, Jetset Travelworld Limited and Orbitz Worldwide announced the signing of a ten-year Strategic Alliance Agreement, which provides the Jetset Travelworld Group (JTG) access to Orbitz Worldwide's proven global technology platform to power its new online offering, helloworld.com.au.
• In December 2013, Orbitz launched the latest installment of its successful online video initiative Orbitz Originals. "Orbitz Originals: Authentic Florida," viewable at Orbitz.com/Bradenton, was produced in partnership with the Bradenton Area Convention and Visitors Bureau and is hosted by award-winning travel expert Richard Bangs. To date, Orbitz Originals videos highlighting the Cayman Islands, Qatar, Vermont, Ireland, Cancun and New York have generated more than one million views by travelers seeking inspiration for future trips.
Partner Services
• During the fourth quarter 2013, Orbitz Worldwide signed multi-year hotel distribution agreements with BG Hotels and Fergus Hotels in the Balearics, Bourbon Hotels & Resorts and Deville Hotels in Brazil, Destination Hotels & Resorts, G6 Hospitality (which owns and manages the Motel 6 and Studio 6 brands), GLH Hotels Management in the UK (which owns
and manages the Thistle and Guoman Hotels) and Jin Jiang International in China.
• During the fourth quarter, Orbitz Worldwide signed distribution agreements with a number of airlines including Aeromexico, Air Berlin Airlines, China Airlines, Fiji Airlines, LATAM Airlines, Royal Jordanian Airlines, Saudi Arabian Airlines and Swiss International Airlines.
• In February 2014, Orbitz announced that it had entered into new multi-year global distribution agreements with Amadeus, Sabre and Travelport for the provision of technology and travel management solutions.
Outlook
For the first quarter 2014, the company expects:
• Net revenue between $202 million and $207 million; and
• Adjusted EBITDA between $22 million and $25 million.
For the full year 2014, the company expects:
• Net revenue growth in the low to mid single digits; and
• Adjusted EBITDA growth in the high single digits.
This outlook assumes foreign exchange rates as of January 31, 2014.
