Hotel, vacation, and timeshare company Wyndham Destinations (NYSE: WYND) shares are trading up more than 2.5% this morning following a Current Report filing with the SEC and a new investor presentation. The presentation, published today on Wyndham's investor site, shows potentially higher than expected EBITDA for the second quarter of 2020, ample cash reserves, and other positive indications of weathering COVID-19.
Wyndham revealed it currently has $1 billion of unrestricted cash available, with a $342 million credit facility. At the cash burn rate it's currently experiencing, the company claims it can continue operations for 23 months even assuming no positive change in cash flow.
Image source: Getty Images.
It went on to reveal it is planning to restore cash flow to positive territory in the near future. It anticipates being able to start opening its resorts during the latter part of Q2, "ramping through the summer," and this will lead to an adjusted free cash flow of $100 million to $150 million for the full year.
It also predicts its adjusted EBITDA for Q2 may be flat, which would beat analyst consensus expectations of a $10.8 million drop in the metric. However, its lower-end estimate for Q2 EBITDA is negative $20 million.
Image source: Wyndham Destinations.
Elsewhere in the presentation, Wyndham offers several comments on why it expects a successful reopening in 2020. These include the fact that over 95% of America's population lives within 300 miles of a Wyndham resort, making automobile access easy in case air travel continues to be disrupted or unpopular. It also points out how timeshares fit in with social distancing, and asserts, "the lockdown has created pent-up demand for vacations."
