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» LodgeNet Interactive CEO Discusses Q2 2011 Results - Earnings Call Transcript
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» LodgeNet CEO Discusses Q3 2010 Results - Earnings Call Transcript
Before we get started, I’d like to remind you that some topics to be discussed today that do not relate to historical performance may include or constitute forward-looking statements within the meaning of the federal securities laws and are subject to risks, uncertainties and other factors that could cause actual results, performance or achievements of the company to be materially different from those expressed or implied by such forward-looking statements. Certain of the risk factors which could affect the company are set forth in the company’s 10-K and other filings.With that said, I’ll now turn the call over to Mr. Scott Petersen. Scott Petersen Thank you, Ann, and good afternoon everyone. In the third quarter, we continued to deliver solid financial results, all of which were in line with our quarterly guidance. Two metrics were of particular significance. First, we generated positive net income for the quarter based on our operating activities, and that’s a milestone result since the time of our strategic acquisitions in 2007. During the 2002 to 2006 timeframe, I led the management team from deep losses to positive net income and with our acquisitions of On Command and StayOnLine at 2007 we signed up for a similar campaign. Over the past four years, we’ve gone from a quarterly loss of about $11.5 million in the third quarter of 2007 to positive net income over $600,000 today. And this third quarter result foreshadows future profitability and that’s on horizon because of the revenue growth we are generating from our many strategic initiatives as well as our more efficient operating cost structures. Second and speaking of revenue growth, we delivered a number of landmark result with hospitality revenue per room turning positive as compared to last year and has furthered since the start of this economic recession. Strong Hollywood movie revenue really turned to headwinds as that we have been experiencing through the last several years for guest entertainment. Our VOD marketing initiatives are producing positive results for us and Hollywood also helped us during the quarter with more popular product like Bridesmaids.
And our strategy to diversify our revenue streams by selling more services and systems to our customers continues to pay off as revenue, excluding guest entertainment services was up 10% on a per room basis.After Frank covers the details of our financial results during the quarter, I’ll give you some additional thoughts on how I believe our strategic growth initiatives are continuing to drive growth for our company. Our high-definition interactive television platform continues to perform very well and our economic model, which now incorporates incremental revenues and cash flows from our new Envision Apps, continues to develop and further diversify our business. And during the quarter we made several announcements, which I’d like to review with you, but I believe place LodgeNet on a solid growth trajectory for the next several years. So, Frank, please? Frank Elsenbast Thanks, Scott, and good afternoon. As Scott mentioned, our third quarter financial results achieved two milestones for the company with positive net income in revenue per room growth across our hospitality room base. Our results were solidly within or at the high end of our Q3 guidance. I will review some of the key factors that contributed to these results and discuss our guidance for the final quarter of 2011. On slide number three, revenue for the third quarter was $107 million, which was at the midpoint of our financial guidance. Revenue highlights for the quarter includes 17% revenue growth within our healthcare business as they continue to build their install base with the leading healthcare facilities around the country. Growth with our hospitality sector was led by system sales with 10% revenue growth and advertising which was up 8% versus prior year. In total, our diversified revenues grew 2.4% over the last year. On slide number four is a more detailed breakdown of our revenue per room by service line. Total revenue per room of $21.84 was an increase of 1.3% over the last year. This improvement reverses the trend that we’ve experienced since the beginning of the economic slowdown. The improvement this quarter was driven by two continuing trends. First, the Guest Entertainment revenue per room decline continues to moderate. Or enhanced VOD 2.0 merchandising efforts, higher performance in our high-definition rooms and improved Hollywood content have all contributed to the stabilization of this metric. Read the rest of this transcript for free on seekingalpha.com