Interval Leisure Group, Inc. (NASDAQ:ILG) Q2 2016 Earnings Conference Call - Final Transcript
Aug 04, 2016 • 04:30 pm ET
Good afternoon. At this time I would like to welcome everyone to ILG's Second-Quarter Earnings Conference Call. Please be advised that this call is being recorded on August 4, 2016. My name is Tonya and I will be your coordinator for today. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time.I would now like to turn the call over to Ms. Lily Arteaga, VP of IR for Interval Leisure Group. Ma'am, you may begin your conference.
Thank you, operator, and welcome to everyone joining us for ILG's second quarter 2016 earnings conference call. (Forward-Looking Cautionary Statements) Now I would like to turn the call over to Craig Nash, our Chairman, President and CEO. Craig?
Thanks, Lily, and good afternoon to everyone. Thank you for joining us for Interval Leisure Group's second-quarter earnings call.Today is an important day as it marks the first time our results incorporate the Vistana business. I would like to take this opportunity to publicly welcome Vistana's approximately 4500 associates into the ILG family.
The new ILG combines fee-for-service and predictable revenue from our exchange, club and management businesses with the branded resort portfolios and attractive pipelines of Vistana and Hyatt Vacation Ownership. This combination creates a company with greater scale and enhanced long-term growth and free cash flow profile.Results for the first half of 2016 were on target with our expectations.
The legacy ILG business was relatively consistent with last year and Vistana made a significant contribution since the transaction closed on May 11. Our adjusted EBITDA for the second quarter was $62 million. Assuming we had owned Vistana for the entire month of May, adjusted EBITDA for the second quarter would have been of approximately $65 million.In the quarter, our top priority was and continues to be the seamless combination of Vistana and ILG.
The day one mandate was the integration into ILG HR, payroll and email systems. Our next focus is around transition services to facilitate the orderly transfer of processes and platforms from Starwood to ILG. We expect most of the work covered by our agreements with Starwood including the migration to ILG Financial Systems will be concluded by Q1 2017.As we move forward with these efforts, we are focused on revenue and cost synergies. For example, we plan to roll out our telephony system to Vistana which will provide intelligent and efficient call routing based on customer data, deliver advanced capabilities for recording and monitoring and implement a platform to enable the use of home agents.
This will establish the foundation for further efficiencies.On the revenue front, all new purchasers at Sheraton and Westin properties are now being enrolled as Interval Gold Members at point of sale. This upgraded membership provides buyers with an expanded fleet of benefits and can be renewed by members for annual or multiyear terms. We expect these memberships will be additive to the total Interval revenue as we extend them in future years.We