Wyndham Destinations, Inc. (NYSE:WYND) Q2 2019 Earnings Conference Call - Final Transcript

Jul 30, 2019 • 08:30 am ET


Wyndham Destinations, Inc. (NYSE:WYND) Q2 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome to Wyndham Destinations Second Quarter 2019 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Chris Agnew. Please go ahead.

Christopher Agnew

Thanks Keith. Good morning and welcome. Before we begin, we'd like to remind you that our discussions this morning will include forward-looking statements. Actual results could differ materially from those indicated in the forward-looking statements, and the forward-looking statements made today are effective only as of today.

We undertake no obligation to publicly update or revise these statements. The factors that could cause actual results to differ are discussed in our SEC filings. And you can find a reconciliation of the non-GAAP financial measures discussed in today's call and our earnings press release on our website at investor.wyndhamdestinations.com.

This morning, Michael Brown, our President and Chief Executive Officer will provide an overview on our strategic initiatives and our second quarter results. And Mike Hug, our Chief Financial Officer, will then provide greater detail on our results and discuss our outlook. Following these remarks, we will be available to respond to your questions.

With that, I am pleased to turn the call over to Michael Brown.

Michael D. Brown

Thank you, Chris. Good morning everyone and thank you for joining us today. As we celebrate our one year anniversary, this call marks our fourth as Wyndham Destinations. We are proud of the progress made since the spin was announced in 2017 and the accomplishments achieved in our first year as a public company.

The progress confirms that we are executing our strategy to put owners and members on great vacations, to deliver mid-single-digit organic growth, to generate strong and consistent free cash flow, and to return significant capital to shareholders. On this last point, we have now returned $585 million in capital to shareholders since the spin in June of 2018. Earlier this morning, Wyndham Destinations reported another strong quarter with adjusted EBITDA of $255 million and adjusted EPS of $1.45. EPS was above our guidance range and 16% higher than the prior year.

We were pleased with our operating performance in particular the strength in owner arrivals, the growth of Blue Thread sales and the year-over-year and sequential improvement in our loan loss provision rate. We are increasing our full year outlook for adjusted free cash flow to a range of $555 million to $575 million. And we are also increasing our adjusted EPS guidance range to $5.38 to $5.58. Our new EPS range represents 13% year-over-year growth at the midpoint and we are reaffirming our outlook for full year adjusted EBITDA guidance of $995 million to $1,015 million.

As we announced this morning, we concluded our strategic review of Wyndham Vacation Rentals. The sale of this business to Vacasa for $162 million is expected to close in the fall. We believe Vacasa is the ideal buyer of the business and as a result, we will receive a small equity interest in their company as part of the transaction. The sale will be comprised