Interval Leisure Group Earnings Call Insights: Acquisition Environment and Corporate Side Efficiencies

Interval Leisure Group (NASDAQ:IILG) recently reported its first quarter earnings and discussed the following topics in its earnings conference call.

Acquisition Environment

Patrick Scholes – SunTrust Robinson Humphrey: Several questions for you here. One, I’d like to just hear update from you on how you feel the acquisition environment is going or progressing since we had our last earnings call. That’s the first question.

Craig M. Nash – CEO: As we stated the opportunities, the pipeline is vast. We are, obviously, analyzing a number of interesting opportunities, and we’ll continue to do so. As you know, a right deal takes time and we continue to work on those things.

Patrick Scholes – SunTrust Robinson Humphrey: I imagine you feel that you are currently working on the right deal. Not to put words in your mouth, is that a fair assumption?

Craig M. Nash – CEO: That’s our intention.

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Patrick Scholes – SunTrust Robinson Humphrey: Second question concerns your – understanding the cash flow, you have received about $10 million payment on financing receivables and as I recall I think this is the first time you’ve seen a large chunk come in like that, just a little bit more color on that please?

William L. Harvey – CFO: Sure. If you recall, we have made loans in the past in conjunction with the things that we do. In this quarter, we had one (paid off).

Patrick Scholes – SunTrust Robinson Humphrey: That’s what I figured. And the third concerns, where do you stand with pricing increases or promotions for the Interval segment?

Craig M. Nash – CEO: We look at pricing throughout the year. We have typically done an exchange increase in the past and we are looking at similar opportunities this year.

Patrick Scholes – SunTrust Robinson Humphrey: Remind again, when the last one was and how much percentagewise was that?

Craig M. Nash – CEO: I believe it was $5 for the U.S. and it was August of last year…

Patrick Scholes – SunTrust Robinson Humphrey: It was at on the base fee or the exchange fee, the $5?

Craig M. Nash – CEO: That was the exchange fee, just the exchange fee.

Patrick Scholes – SunTrust Robinson Humphrey: Okay, so it was 3% or so. Then you intend again to continue with that. I think that’s it for now.

 

Corporate Side Efficiencies

Stephen Altebrando – Sidoti & Company: Margins in Membership were better than expected, particularly considering the mix probably that you have saw year-over-year, can you expand on how you got there, are you seeing more efficiencies as a corporate side is becoming a bigger part of your business?

William L. Harvey – CFO: I think, we are seeing all of that scene. In addition, we did have some things in G&A that you are can see in the release. We had lower non-cash comp. We had some capitalized salaries, and we had some health and welfare lower costs due to our self-insured claims in the quarter. Those numbers totaled about $1.8 million or so, and they were roughly one-third, one-third, and one-third.

Stephen Altebrando – Sidoti & Company: Can you update us on the number of Platinum numbers you are at?

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Craig M. Nash – CEO: Yes, we are at about 100,000.

Stephen Altebrando – Sidoti & Company: Then in terms of going back one of the – some of the synergies that have been talked about with the VRI acquisition was, perhaps bolstering Membership via non-traditional means, if you could update us on how that progresses?

Craig M. Nash – CEO: We have started that process. We are in beta with a couple of sales and marketing distribution companies that are recycling defaulted inventory at those properties. We are in the process of looking at a number of other opportunities in that space.

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