Silverleaf Resorts, Inc. (Nasdaq:SVLF) today announced its
financial results for the three and six month periods ended June
30, 2007. Financial highlights for the second quarter 2007:
Vacation Interval sales increased 20.4% to $58.6 million Net income
improved 14.3% to $7.7 million Diluted earnings per share increased
17.6% to $0.20 Sharon K. Brayfield, President, commented: �For the
first six months of 2007, our net income of $14.3 million is in
line with the revised guidance that we issued in June 2007 of net
income between $27.5 and $28.5 million. Our encouraging results
thus far, particularly the increase in Vacation Interval sales, are
due to continued growth in customer tours, higher closing
percentages on our sales to existing customers, and an overall
increase in average sales prices during the first half of 2007
versus the comparable period of 2006. Our focus will continue to be
on sales to existing customers while providing new vacation
experiences, such as the indoor water park we are constructing at
The Villages Resort which serves the Dallas/Fort Worth market. We
anticipate the opening of this new attraction in late 2007.� 2007
Second Quarter Results Vacation Interval sales increased 20.4% to
$58.6 million during the second quarter of 2007 compared to $48.6
million in the prior-year period. Vacation Interval sales to new
customers increased 4.4% to $22.9 million. Vacation Interval sales
to existing customers increased 33.7% to $35.7 million. Total
revenue for the second quarter of 2007 increased 20.4% to $63.9
million compared to $53.0 million in the second quarter of 2006.
Sales and marketing expense increased to 49.7% of Vacation Interval
sales for the second quarter of 2007 compared to 48.2% in the
prior-year period. The $5.7 million increase in sales and marketing
expense is primarily attributable to our increased volume of
Vacation Interval sales. The increase is also due to increased
costs related to new and existing promotional programs used to
generate tours. Cost of Vacation Interval sales remained the same
at 9.7% for the second quarter of 2007 as compared to the second
quarter of 2006. Net income for the quarter ended June 30, 2007
increased to $7.7 million, or $0.20 per diluted share compared to
net income of $6.8 million, or $0.17 per diluted share for the
quarter ended June 30, 2006. This represents a 17.6% improvement in
earnings per fully diluted share. 2007 Year-to-Date Results
Vacation Interval sales increased 24.2% to $111.9 million during
the first six months of 2007 compared to $90.1 million in the
prior-year period. Vacation Interval sales to new customers
increased 10.1% to $46.2 million. Vacation Interval sales to
existing customers increased 36.6% to $65.7 million. Total revenue
for the first half of 2007 increased 24.3% to $122.7 million
compared to $98.7 million in the first half of 2006. Sales and
marketing expense increased to 50.6% of Vacation Interval sales in
the first half of 2007 compared to 47.3% in the prior-year period.
The $13.9 million increase in sales and marketing expense is
primarily attributable to our increased volume of Vacation Interval
sales, as well as increased costs related to new and existing
promotional programs used to generate tours. The increase is also
due in part to expenses related to our off site sales center which
was open throughout the first half of 2007 and for only a portion
of the first half of 2006. Cost of Vacation Interval sales remained
fairly steady at 10.2% for the first half of 2007 compared to 9.9%
for the first half of 2006. Net income for the six months ended
June 30, 2007 increased to $14.3 million, or $0.36 per diluted
share compared to net income of $13.0 million, or $0.33 per diluted
share for the six months ended June 30, 2006. For comparability
purposes, the Company�s results for the six months ended June 30,
2006 and 2007 shown below include core operations, and exclude a
$499,000 gain on sale of undeveloped land in the first quarter of
2006. Six Months Ended June 30, June 30, � 2007 � � 2006 � Net
income, as reported $ 14.3 $ 13.0 Adjustments between net income as
reported, and adjusted net income: Gain on sale of undeveloped land
- (0.5 ) Provision for income taxes, as reported � 8.9 � � 8.1 �
Adjusted income before provision for income taxes 23.2 20.6
Provision for income taxes at 38.5% � (8.9 ) � (7.9 ) Adjusted Net
Income $ 14.3 � $ 12.7 � Adjusted Fully Diluted EPS $ 0.36 � $ 0.32
� Balance Sheet Our notes receivable and revolving debt balances as
of June 30, 2007 have increased in accordance with our increased
Vacation Interval sales, as compared to the balances as of December
31, 2006. At June 30, 2007, our senior credit facilities provided
for loans of up to $473.3 million, of which $203.8 million is
available for future advances. Expansion at our existing resorts,
including construction of lodging units, additional amenities, and
other assets resulted in an $8.1 million increase in our
inventories. Outlook We are maintaining our full year guidance that
we updated in June of this year of net income between $27.5 and
$28.5 million which represents a 20% to 24% increase over full-year
2006 results. The increased guidance is the result of higher than
expected Vacation Interval sales and interest income. About
Silverleaf Resorts Based in Dallas, Texas, Silverleaf Resorts, Inc.
currently owns and operates timeshare resorts with a wide array of
country club-like amenities, such as golf, clubhouses, swimming,
tennis, boating, and many organized activities for children and
adults. For additional information, please visit
www.silverleafresorts.com. This release contains certain
forward-looking statements that involve risks and uncertainties and
actual results may differ materially from those anticipated. The
Company is subject to specific risks associated with the timeshare
industry, the regulatory environment, and various economic factors.
These risks and others are more fully discussed under the heading
�Risk Factors� in the Company�s reports filed with the Securities
and Exchange Commission, including the Company�s 2006 Annual Report
on Form 10-K (pages 21 through 30 thereof) filed on March 16, 2007.
For more information or to visit our website, click here:
http://www.b2i.us/irpass.asp?BzID=1358&Nav=0&S=0&L=1 �
SILVERLEAF RESORTS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except share and per share
amounts) (Unaudited) � Three Months Ended Six Months Ended June 30,
June 30, � 2007 � � 2006 � � 2007 � � 2006 � Revenues: Vacation
Interval sales $ 58,577 $ 48,635 $ 111,942 $ 90,102 Estimated
uncollectible revenue � (9,372 ) � (8,428 ) � (17,913 ) � (15,615 )
Net sales 49,205 40,207 94,029 74,487 � Interest income 12,940
11,323 25,487 21,418 Management fee income 615 465 1,230 930 Other
income � 1,093 � � 1,038 � � 1,933 � � 1,870 � Total revenues
63,853 53,033 122,679 98,705 � Costs and Operating Expenses: Cost
of Vacation Interval sales 5,683 4,736 11,453 8,917 Sales and
marketing 29,142 23,423 56,591 42,655 Operating, general and
administrative 9,480 8,181 17,903 15,370 Depreciation 858 584 1,716
1,123 Interest expense and lender fees � 6,126 � � 5,117 � � 11,777
� � 9,542 � Total costs and operating expenses 51,289 42,041 99,440
77,607 � Income before provision for income taxes 12,564 10,992
23,239 21,098 Provision for income taxes � (4,837 ) � (4,232 ) �
(8,947 ) � (8,123 ) � Net income $ 7,727 � $ 6,760 � $ 14,292 � $
12,975 � � Basic net income per share $ 0.20 � $ 0.18 � $ 0.38 � $
0.35 � � Diluted net income per share $ 0.20 � $ 0.17 � $ 0.36 � $
0.33 � � Weighted average basic common shares outstanding �
37,808,154 � � 37,501,246 � � 37,808,154 � � 37,497,794 � � �
Weighted average diluted common shares outstanding � 39,396,758 � �
39,250,633 � � 39,384,338 � � 39,217,335 � � SILVERLEAF RESORTS,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in
thousands, except share and per share amounts) � � June 30,
December 31, ASSETS � 2007 � 2006 (Unaudited) � Cash and cash
equivalents $ 7,677 $ 11,450 Restricted cash 15,102 15,771 Notes
receivable, net of allowance for uncollectible notes of $70,583 and
$68,118, respectively 258,240 229,717 Accrued interest receivable
3,218 2,936 Investment in special purpose entity 10,097 13,008
Amounts due from affiliates 2,410 1,251 Inventories 155,833 147,759
Land, equipment, buildings, and leasehold improvements, net 32,723
28,040 Land held for sale 281 205 Prepaid and other assets � 28,709
� 24,393 � TOTAL ASSETS $ 514,290 $ 474,530 � � LIABILITIES AND
SHAREHOLDERS' EQUITY � LIABILITIES Accounts payable and accrued
expenses $ 12,663 $ 14,192 Accrued interest payable 2,276 1,792
Amounts due to affiliates 77 246 Unearned Vacation Interval sales
1,057 - Unearned samplers 7,151 6,245 Income taxes payable 385 163
Deferred income taxes 23,509 17,683 Notes payable and capital lease
obligations 277,800 254,550 Senior subordinated notes � 26,817 �
31,467 � Total Liabilities � 351,735 � 326,338 � COMMITMENTS AND
CONTINGENCIES � SHAREHOLDERS' EQUITY Preferred stock, 10,000,000
shares authorized, none issued and outstanding - - Common stock,
par value $0.01 per share, 100,000,000 shares authorized,
37,808,154 shares issued and outstanding at June 30, 2007 and
December 31, 2006 378 378 Additional paid-in capital 112,626
112,555 Retained earnings � 49,551 � 35,259 � Total Shareholders'
Equity � 162,555 � 148,192 � TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 514,290 $ 474,530
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