SOUTHLAKE, Texas, March 20, 2020 /PRNewswire/ -- Sabre
Corporation (NASDAQ: SABR), the leading software and
technology company that powers the global travel industry,
announced today that it is taking significant measures to
strengthen its financial position in response to the current
industry conditions. The travel industry continues to be adversely
affected by the global health crisis caused by the outbreak of
COVID-19, as well as by government directives that have been
enacted to slow the spread of the virus.
"This is an unprecedented time. The global travel industry is
facing challenges beyond what has been experienced before. We
believe Sabre is well positioned to navigate this challenging
environment. We are fortunate that significant aspects of our cost
structure are variable and are taking steps to help align our other
costs with the current demand environment," said Sean Menke, President and CEO of Sabre. "We have
identified and are in the process of removing over $200 million in cash costs from the business in
2020. Given the magnitude of travel decline and the unknown
duration of the COVID-19 impact, we will continue to monitor travel
activity and take additional steps should we determine they are
necessary."
As part of these cost reductions, Sabre has begun implementing
several immediate actions with regard to its workforce and other
costs during this difficult business climate. These actions
include:
- A temporary reduction in base compensation pay for its US-based
salaried workforce, including a 25% reduction for its CEO, and
Sabre will work with international employees on a
country-by-country basis,
- A reduction in the cash retainer for members of its Board of
Directors,
- Sabre's 401(k) match program will be temporarily suspended for
US-based employees who contribute to its 401(k) program,
- On a global basis, Sabre is offering voluntary unpaid time off,
voluntary severance and a voluntary early retirement program,
and
- Sabre is reducing third-party contracting, vendor costs and
other discretionary spending.
Additionally, the decline in global travel driven by COVID-19 is
expected to result in:
- A proportional decline in Sabre Travel Network incentive
expense, and
- A reduction in Sabre's approximately $250 million semi-variable technology hosting
costs.
In addition to the cost reductions described above:
- On March 16, Sabre's Board of
Directors voted to suspend the payment of quarterly cash dividends
on Sabre's common stock, effective with respect to the dividends
occurring after the March 30, 2020
payment, and
- Sabre announced the suspension of its share repurchase
program.
"As it relates to our liquidity, we drew down our revolver in
the amount $375 million, which adds
to our existing cash balance of $436
million as of 2019 year-end. Additionally, our credit
agreement permits us to suspend the financial covenant related to
the maintenance of our leverage ratio if a "Material Travel Event
Disruption" has occurred. We believe that recent capacity
reductions by domestic airlines will lead in the coming months to a
finding that a Material Travel Event Disruption has occurred," said
Doug Barnett, CFO of Sabre. "We also
note that about two-thirds of our cost structure is adjustable in
the near-term. We will continue to assess the travel environment
and whether additional cost actions beyond the $200 million announced today are necessary."
Given the magnitude and uncertainty related to COVID-19, Sabre
has withdrawn the guidance provided on its February 26, 2020 earnings call.
About Sabre Corporation
Sabre Corporation is a
leading software and technology company that powers the global
travel industry, serving a wide range of travel companies including
airlines, hoteliers, travel agencies and other suppliers. The
company provides retailing, distribution and fulfilment solutions
that help its customers operate more efficiently, drive revenue and
offer personalized traveler experiences. Through its leading travel
marketplace, Sabre connects travel suppliers with buyers from
around the globe. Sabre's technology platform manages more than
$260B worth of global travel spend
annually. Headquartered in Southlake,
Texas, USA, Sabre serves customers in more than 160
countries around the world. For more information visit
www.sabre.com.
Forward-looking statements
Certain statements herein
are forward-looking statements about trends, future events,
uncertainties and our plans and expectations of what may happen in
the future. Any statements that are not historical or current facts
are forward-looking statements. In many cases, you can identify
forward-looking statements by terms such as "believe," "could,"
"likely," "expect," "plan," "commit," "guidance," "outlook,"
"anticipate," "will," "incremental," "preliminary," "forecast,"
"continue," "strategy," "confidence," "momentum," "estimate,"
"objective," "project," "may," "should," "would," "intend,"
"potential" or the negative of these terms or other comparable
terminology. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause Sabre's
actual results, performance or achievements to be materially
different from any future results, performances or achievements
expressed or implied by the forward-looking statements. The
potential risks and uncertainties include, among others, the
duration and effects of the novel
coronavirus (COVID-19), dependency on transaction volumes
in the global travel industry, particularly air travel transaction
volumes, including from airlines' insolvency or suspension of
service or aircraft groundings, the timing, implementation and
effects of the technology investment and other strategic
initiatives, the completion and effects of travel platforms, travel
suppliers' usage of alternative distribution models, exposure to
pricing pressure in the Travel Network business, changes affecting
travel supplier customers, maintenance of the integrity of our
systems and infrastructure and the effect of any security breaches,
failure to adapt to technological advancements, competition in the
travel distribution market and solutions markets, implementation of
software solutions, reliance on third parties to provide
information technology services and the effects of these services,
the finalization of an agreement to implement a full-service
property management system, the execution, implementation and
effects of new or renewed agreements, dependence on establishing,
maintaining and renewing contracts with customers and other
counterparties and collecting amounts due to us under these
agreements, dependence on relationships with travel buyers, our
collection, processing, storage, use and transmission of personal
data and risks associated with PCI compliance, our ability to
recruit, train and retain employees, including our key executive
officers and technical employees, the financial and business
results and effects of acquisitions, including related costs, and,
as applicable, the closing and integration of these acquisitions,
the effects of any litigation and regulatory reviews and
investigations, including with respect to proposed and completed
acquisitions, adverse global and regional economic and political
conditions, including, but not limited to, economic conditions in
countries or regions with traditionally high levels of exports to
China or that have
commodities-based economies and the effect of "Brexit" and
uncertainty due to related negotiations, risks arising from global
operations, reliance on the value of our brands, failure to comply
with regulations, use of third-party distributor partners, the
effects of the implementation of new accounting standards,
and tax-related matters, including the effects of the Tax
Cuts and Jobs Act. More information about potential risks and
uncertainties that could affect our business and results of
operations is included in the "Risk Factors" and "Forward-Looking
Statements" sections in our Annual Report on
Form 10-K filed with the SEC on February 26, 2020
and in our other filings with the SEC. Although we believe that the
expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future events, outlook, guidance,
results, actions, levels of activity, performance or achievements.
Readers are cautioned not to place undue reliance on these
forward-looking statements. Unless required by law, Sabre
undertakes no obligation to publicly update or revise any
forward-looking statements to reflect circumstances or events after
the date they are made.
SABR-F
Contacts:
Media
Kristin Hays
kristin.hays@sabre.com
sabrenews@sbre.com
Investors
Kevin
Crissey
kevin.crissey@sabre.com
sabre.investorrelations@sabre.com
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SOURCE Sabre Corporation