UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2003
____________________
Commission File Number 0-22935
PEGASUS SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2605174
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
CAMPBELL CENTRE I, 8350 NORTH CENTRAL EXPRESSWAY, SUITE 1900, DALLAS, TEXAS
75206
(Address of principal executive office)
(Zip Code)
Registrant's telephone number, including area code: (214) 234-4000
Item 5. Other Events
On February 4, 2003, Pegasus Solutions, Inc. issued a press release
announcing its financial results for the fourth quarter and year ended December
31, 2002, as well as its plans to strategically integrate the company. Attached
to this current report on Form 8-K is a copy of the related press release dated
February 4, 2003.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit Number Description
- --------------- -----------
99.1 Press release issued February 4, 2003
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this current report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
PEGASUS SOLUTIONS, INC.
February 5, 2003 /s/ SUSAN K. COLE
--------------------
Chief Financial Officer
EXHIBIT INDEX
Exhibit Number Description
--------------- -----------
99.1 Press release issued February 4, 2003
Exhibit 99.1 Press release issued February 4, 2003
CONTACTS:
Pegasus Solutions FD Morgen-Walke
Marcie Hyder Kirin Smith
Press: Karin Wacaser Press: Evan Goetz
214-234-4000 212-850-5600
PEGASUS SOLUTIONS REPORTS FOURTH QUARTER AND FULL YEAR 2002 RESULTS;
ANNOUNCES STRATEGIC INTEGRATION, ESTIMATES $8 MILLION TO $9 MILLION IN ANNUAL
COST SAVINGS
DALLAS, TX-FEBRUARY 4, 2003- PEGASUS SOLUTIONS, INC. (NASDAQ: PEGS), a leading
worldwide provider of hotel reservations-related services and technology, today
announced financial results for the fourth quarter and year ended December 31,
2002, as well as its plans to strategically integrate the company.
On a GAAP basis, the company's net loss per diluted share for the fourth quarter
2002 was $0.06, compared to a net loss per diluted share of $0.14 for the fourth
quarter of 2001. For the full year 2002, diluted net loss per share was $0.14,
compared to $1.21 for 2001. For comparative purposes, the company adopted
Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other
Intangible Assets," on January 1, 2002, and accordingly, did not record goodwill
amortization during 2002. If SFAS 142 had been in effect during 2001,
comparable net income (loss) per share for the fourth quarter and full year 2001
would have been $0.01 and ($0.61), respectively.
Diluted cash earnings, which excludes purchase accounting amortization and
non-recurring items, was $0.13 per share for the fourth quarter of 2002,
compared to $0.05 per share for the same quarter last year representing a 160
percent increase. For the full year 2002, diluted cash earnings was $0.54 per
share or 20 percent higher than the $0.45 per share generated in 2001.
"Our achievement of 20 percent cash EPS growth in 2002 reflects the strength and
resilience of our business model, particularly in light of the challenging
economic and travel industry climate throughout 2002," said John F. Davis, III,
chairman and chief executive officer of Pegasus Solutions.
Certain Revenue and Expense Reclassifications
- -------------------------------------------------
Historically, certain reimbursable expenses, primarily GDS fees the company pays
on behalf of and subsequently bills to its customers, have been recorded as a
reduction to revenue. Under current accounting rules that went into effect in
2002, these amounts should be recorded as revenue with a corresponding amount
recorded as expense. 2002 and 2001 financial results have been reclassified to
conform to this required presentation. These reclassifications had no impact on
the company's net loss, net loss per share, cash earnings per share or EBITDA.
However, EBITDA as a percent of revenue, or EBITDA margin, decreased slightly as
a result of these reclassifications. A reconciliation is provided below with
more details regarding these reclassifications.
Fourth Quarter 2002 Results and Other Highlights
- ------------------------------------------------------
- - Total revenue was $43.4 million, compared to $42.0 million for the
year-ago quarter.
- - Consolidated EBITDA increased to $8.3 million, or 61 percent, over
adjusted EBITDA for the fourth quarter of 2001. Consolidated EBITDA margins
improved to 19 percent from 12 percent in 2001.
- - The company's technology division generated revenue of $27.3 million and
EBITDA of $5.3 million, or 20 percent of revenue. This compared to revenue of
$26.4 million and adjusted EBITDA of $4.0 million, or 15 percent of revenue, for
the same quarter last year.
- - The company's hospitality division, or Utell, generated revenue of $16.1
million and EBITDA of $3.0 million, or 19 percent of revenue. This compared to
revenue of $15.6 million and adjusted EBITDA of $1.2 million, or 8 percent of
revenue, for the same quarter last year.
- - Cash flow from operations was $6.6 million.
- - Pegasus signed Travelodge UK to a comprehensive 7-year agreement for a
suite of hotel technology services, including its PegasusCentral(TM) Web-based
hospitality management service.
Full Year 2002 Results and Other Highlights
- -------------------------------------------------
- - Total revenue, excluding a customer termination fee, was $186.4 million in
2002, which was essentially flat compared to revenue from continuing operations
in 2001.
- - Consolidated EBITDA, excluding a customer termination fee, increased to
$37.5 million, resulting in consolidated EBITDA margins improving from 16
percent in 2001 to 20 percent in 2002.
- - Excluding a customer termination fee, the company's technology division
generated revenue of $116.9 million and EBITDA of $24.1 million, or 21 percent
of revenue. This compared to revenue of $112.9 million and adjusted EBITDA of
$23.3 million, or 21 percent of revenue, for 2001. See table below for more
information on non-recurring items.
- - The company's hospitality division, or Utell, generated revenue of $69.5
million, compared to $73.1 million from continuing operations last year.
Utell's EBITDA was $13.4 million, almost doubling adjusted EBITDA for the prior
year of $7.0 million.
- - Pegasus' balance sheet remains strong, including $23.9 million of cash,
cash equivalents and short-term investments with no outstanding debt.
- - Cash flow from operations was $38.3 million, compared to $25.4 million in
2001.
Revenue by Business Unit
- ---------------------------
Within the technology division, fourth quarter 2002 Reservation Services revenue
was $18.5 million compared to fourth quarter 2001 revenue of $18.1 million. For
the full year, Reservation Services revenue, excluding the customer early
termination fee, was $80.5 million, a 1 percent increase over 2001. The
increase in year-over-year revenues primarily resulted from revenues from new
customers, incremental increases in revenues from existing customers and a 46
percent increase in higher margin Internet transactions. These increases were
partially offset by the loss of two CRS customers during the year.
During the fourth quarter, Financial Services revenue increased to $7.3 million,
or 14 percent, over the prior year due to increased transaction volume and gross
commissions processed, and an increase in the average travel agent fee earned
from each transaction. For 2002, Financial Services revenue increased 5 percent
to $29.9 million, compared to $28.5 million for 2001.
Property Systems and Services generated revenue of $1.5 million for the fourth
quarter of 2002, down $370,000 from the fourth quarter of 2001. Property
Systems and Services revenue for the full year was $6.5 million, a 41 percent
increase over 2001. This increase was primarily due to the September 2001
acquisition of Tempe-based Global Enterprise Technology Solutions, LLC (GETS)
and increasing revenues from the continued rollout of PegasusCentral, the
company's Web-based property system.
The company's Utell division had revenue for the quarter totaling $16.1 million,
up 4 percent from the fourth quarter of 2001 due to increases in the gross hotel
revenue delivered and the overall average daily room rates. As expected, full
year revenues from continuing operations decreased 5 percent from $73.1 million
in 2001 to $69.5 million in 2002 primarily resulting from the planned portfolio
reduction, which was focused on improving margins on a per hotel basis. The
number of hotels in Utell's portfolio at December 31, 2002 was 14 percent less
than the number of hotels at the end of 2001 as a result of this planned
portfolio reduction.
Strategic Integration
- ----------------------
Today, Pegasus also announced a strategic reorganization to integrate its
technology and hospitality divisions into one operating unit. The single
operating unit will have integrated support functions that will be
customer-driven and will have consolidated sales and marketing, product
development, service delivery, reservation/data management, information
technology, finance and human resources functions.
Commenting on the integration, Davis said, "The reorganization plan we
implemented during late 2001 was successful in demonstrating the true value of
Utell. Our current plan to integrate Utell with our technology business is the
final step in realizing additional synergies as one fully integrated company.
We created this new organizational structure with a focus on our customers and
growing revenue."
The proposed integration plan, which includes the elimination of approximately
270 redundant positions, should be substantially completed during the first half
of 2003. Consultation concerning the potential redundancies is currently
underway. Upon the completion of the reorganization and consolidation of
certain facilities, the estimated annual cost savings are expected to range from
$8 million to $9 million. As a result of the plan, Pegasus will incur
restructure and asset impairment costs ranging from $4 million to $5 million,
which will be recorded over the next several quarters.
Also related to the integration, the company announced changes in key leadership
positions to support the new organizational structure. Mark C. Wells, who was
formerly president and chief operating officer of the company's Utell division,
is now executive vice president and chief operating officer of Pegasus
Solutions. Joseph W. Nicholson, who was formerly president and chief operating
officer of the company's technology division, is taking on a new role as
executive vice president, strategic planning and corporate development. In
addition, Pegasus has established a new position to handle its sales and
marketing efforts worldwide and is actively recruiting a seasoned executive to
fill the role of executive vice president, sales and marketing.
Outlook
- -------
Commenting on the company's outlook, Susan K. Cole, chief financial officer of
Pegasus Solutions, said, "In addition to better aligning our products and
services with customers' needs, this integration plan is designed to optimize
our cost structure to take full advantage of any incremental, internal revenue
growth or improvement in the economy and travel industry. Unfortunately, there
continues to be a slower than anticipated recovery in the nation's economy, soft
demand for corporate business travel and the threat of war, which may continue
to adversely affect our results. Nevertheless, we are still committed to
maintaining our strong balance sheet, improving on our EBITDA margin of 20
percent and generating positive operating cash flows. Due to our strategic
integration plan, we now project our full year 2003 cash earnings estimates to
be in the range of $0.59 to $0.66. As a result of the revenue and expense
reclassifications discussed earlier, we estimate revenue for 2003 to be in the
range of $190 million and $200 million."
In conclusion Davis said, "During 2002, we invested in technology and product
development and built a strong foundation, which we believe will not only carry
us through the current period of uncertainty, but will also allow us to grow and
meet the ever-changing needs of our customers as one fully-integrated company."
Conference Call
- ----------------
Following this release, Pegasus Solutions will host a conference call today at
4:45 p.m. (EST), 3:45 p.m. (CST). The call will be simultaneously Webcast over
the Internet. To access the Webcast, go to the Company's Web site,
http://www.pegs.com. Click on "investor," or go directly to
http://www.pegs.com/investor/investor.htm.
COMPANY INFORMATION
- --------------------
Dallas-based Pegasus Solutions, Inc. (www.pegs.com) is a leading global provider
of hotel reservations-related services and technologies. Its services include
central reservations systems; electronic distribution services that connect more
than 44,000 hotels to the Internet and to the global distribution systems (GDS);
travel agent commission processing and payment services; the Utell marketing and
reservation representation service (www.Utell.com); and PegasusCentral(TM), a
Web-based enterprise solution with property management applications. Pegasus'
customers comprise tens of thousands of travel agencies around the world,
including the top 10 largest U.S.-based travel agencies1foot1Travel Weekly, June
24, 2002, "Top 50 Travel Agencies"; more than 48,000 hotel properties around the
globe, including the 50 largest hotel brands in the world based on total number
of guest rooms2foot2Hotel Business, February 7, 2002, "The Top Hotel Brands" -
ranked by total number of rooms (2001); and thousands of Web sites/services have
their hotel reservations Powered by Pegasus(TM). In addition to its corporate
headquarters in Dallas, Pegasus has 20 offices in 11 countries, including
regional hubs in Phoenix, London and Singapore. The company's stock is traded
on the Nasdaq National Market under the symbol PEGS.
Some statements made in this press release are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements regarding future events, financial
performance and financial projections, as well as management's expectations,
beliefs, hopes, intentions or strategies regarding the future. Because such
statements deal with future events, they are subject to various risks and
uncertainties, and actual results could differ materially from current
expectations. Factors that could cause or contribute to such difference
include, but are not limited to, terrorist acts or war, variation in demand for
and acceptance of the company's products and services and timing of sales,
general economic conditions including a slowdown in technology spending by the
company's current and prospective customers, failure to maintain successful
relationships with and to establish new relationships with customers, the
success of the company's international operations, the level of product and
price competition from existing and new competitors, changes in the company's
level of operating expenses and its ability to control costs, delays in
developing, marketing and deploying new products and services, as well as other
risks identified in the company's Securities and Exchange Commission filings,
including those appearing under the caption Risk Factors in the company's 2001
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed since the
Annual Report.
Management evaluates company performance based on earnings before interest,
income tax, depreciation, amortization and other non-recurring items (EBITDA).
Although EBITDA is not calculated in accordance with generally accepted
accounting principles, Pegasus believes that EBITDA is widely used by analysts,
investors and others as a measure of operating performance. Nevertheless, this
measure should not be considered in isolation of, or as a substitute for,
operating income, cash flows from operating activities or any other measure for
determining the company's operating performance or liquidity that is calculated
in accordance with generally accepted accounting principles. In addition,
Pegasus' calculation of EBITDA is not necessarily comparable to similarly titled
measures reported by other companies.
1Travel Weekly, June 24, 2002, "Top 50 Travel Agencies"
2Hotel Business, February 7, 2002, "The Top Hotel Brands" - ranked by total
number of rooms (2001)
PEGASUS SOLUTIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months Ended Year Ended
December 31, December 31,
------------ ------------
2002 2001 2002 2001
-------- --------- --------- ---------
Revenues:
Service revenues $40,664 $ 39,193 $178,769 $180,668
Customer reimbursements 2,780 2,823 11,181 12,079
-------- --------- --------- ---------
Total revenues 43,444 42,016 189,950 192,747
-------- --------- --------- ---------
Cost of services:
Cost of services 19,941 22,663 88,717 98,838
Customer reimbursements 2,780 2,823 11,181 12,079
-------- --------- --------- ---------
Total cost of services 22,721 25,486 99,898 110,917
-------- --------- --------- ---------
Research and development 1,317 1,956 5,821 7,842
General and administrative expenses 6,470 5,741 25,146 25,201
Marketing and promotion expenses 4,620 4,374 17,998 21,709
Depreciation and amortization 11,623 16,474 48,075 65,651
Restructure costs - 597 - 7,696
-------- --------- --------- ---------
Operating loss (3,307) (12,612) (6,988) (46,269)
Other income (expense):
Interest income, net 307 193 1,224 768
Equity in loss of investee - - - (634)
Gain on sale of business units - 5,460 - 5,538
Other 535 2,044 130 1,914
-------- --------- --------- ---------
Loss before income taxes (2,465) (4,915) (5,634) (38,683)
Income tax benefit (991) (1,579) (2,115) (8,946)
-------- --------- --------- ---------
Net loss $(1,474) $ (3,336) $ (3,519) $(29,737)
======== ========= ========= =========
Net loss per share:
Basic and diluted $ (0.06) $ (0.14) $ (0.14) $ (1.21)
======== ========= ========= =========
Weighted average shares outstanding:
Basic and diluted 24,822 24,632 24,818 24,570
======== ========= ========= =========
PEGASUS SOLUTIONS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS - CASH EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months Ended
December 31, 2002
-----------------
Cash Earnings
As Reported Adjustments Cash Earnings
------------- ------------- --------------
Revenues:
Service revenues $ 40,664 $ - $ 40,664
Customer reimbursements 2,780
------------- ------------- --------------
Total revenues 43,444 - 40,664
------------- ------------- --------------
Cost of services
Cost of services 19,941 - 19,941
Customer reimbursements 2,780
------------- ------------- --------------
Total cost of services 22,721 - 19,941
------------- ------------- --------------
Research and development 1,317 - 1,317
General and administrative expenses 6,470 - 6,470
Marketing and promotion expenses 4,620 - 4,620
Depreciation and amortization1 11,623 (7,803) 3,820
------------- ------------- --------------
Operating income (loss) (3,307) 7,803 4,496
Other income (expense):
Interest income, net 307 - 307
Other 535 - 535
------------- ------------- --------------
Income before income taxes (2,465) 7,803 5,338
Income tax expense (benefit)2 (991) 3,019 2,028
------------- ------------- --------------
Net income (loss) $ (1,474) $ 4,784 $ 3,310
============= ============= ==============
Diluted net income (loss) per share $ (0.06) $ 0.13
============= =============
Diluted weighted average shares outstanding 24,822 25,265
============= =============
<FN>
Notes:
- ------
(1) - To adjust for amortization of purchased identifiable intangible assets.
(2) - To adjust income tax expense (benefit) for assumed 38% tax rate for cash earnings.
PEGASUS SOLUTIONS, INC.
RECONCILIATION OF CERTAIN RECLASSIFICATIONS AND NON-RECURRING ITEMS
($ IN THOUSANDS)
(UNAUDITED)
NOTE:
- -----
Historically, certain reimbursable expenses, primarily GDS fees, the company pays on behalf of and subsequently
bills to its customers, have been recorded as a reduction to revenue. Under current accounting rules that went
into effect in 2002, these amounts should be recorded as revenue with a corresponding amount recorded as
expense. All 2002 and 2001 financial results have been reclassified to conform to this required presentation.
These reclassifications had no impact on the company's net loss, net loss per share, cash earnings per share or EBITDA.
However, EBITDA as a percent of revenue, or EBITDA margin, decreased slightly as a result of these reclassifications.
The following table illustrates these reclassifications as well as non-recurring items that affected the presentation
of the company's financial statements.
THREE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, 2002 DECEMBER 31, 2001
----------------- -----------------
AS REPORTED RECLASSES REVISED AS REPORTED RECLASSES REVISED
------------- ----------- --------- ------------- ----------- ---------
Technology revenue - as reported $ 24,927 $ - $ 24,927 $ 24,584 $ - $ 24,584
Customer reimbursements - 1,521 1,521 - 1,499 1,499
Other - 842 842 - 333 333
------------- ----------- --------- ------------- ----------- ---------
Technology revenue - as revised 24,927 2,363 27,290 24,584 1,832 26,416
------------- ----------- --------- ------------- ----------- ---------
Hospitality revenue - as reported 14,895 - 14,895 14,276 - 14,276
Customer reimbursements - 1,259 1,259 - 1,324 1,324
------------- ----------- --------- ------------- ----------- ---------
Hospitality revenue - as revised 14,895 1,259 16,154 14,276 1,324 15,600
------------- ----------- --------- ------------- ----------- ---------
CONSOLIDATED REVENUE $ 39,822 $ 3,622 $ 43,444 $ 38,860 $ 3,156 $ 42,016
============= =========== ========= ============= =========== =========
CONSOLIDATED OPERATING EXPENSES $ 43,129 $ 3,622 $ 46,751 $ 51,472 $ 3,156 $ 54,628
============= =========== ========= ============= =========== =========
CONSOLIDATED NET LOSS $ (1,474) $ - $ (1,474) $ (3,336) $ - $ (3,336)
============= =========== ========= ============= =========== =========
Technology EBITDA - as reported 5,319 - 5,319 3,768 - 3,768
Non-recurring items1 - - - 197 - 197
------------- ----------- --------- ------------- ----------- ---------
TECHNOLOGY EBITDA - AS REVISED 5,319 - 5,319 3,965 - 3,965
------------- ----------- --------- ------------- ----------- ---------
Technology EBITDA margin % 21.3% -1.8% 19.5% 16.1% -1.1% 15.0%
Hospitality EBITDA - as reported 2,997 - 2,997 94 - 94
Non-recurring items1 - - - 1,109 - 1,109
------------- ----------- --------- ------------- ----------- ---------
HOSPITALITY EBITDA - AS REVISED 2,997 - 2,997 1,203 - 1,203
------------- ----------- --------- ------------- ----------- ---------
Hospitality EBITDA margin % 20.1% -1.6% 18.6% 8.4% -0.7% 7.7%
CONSOLIDATED EBITDA $ 8,316 $ - $ 8,316 $ 5,168 $ - $ 5,168
============= =========== ========= ============= =========== =========
Consolidated EBITDA margin % 20.9% -1.7% 19.1% 13.3% -1.0% 12.3%
<FN>
FOOTNOTE:
- ---------
1 - Non-recurring items excluded from 2001 Technology and Hospitality EBITDAs included restructuring and
associated charges and external consulting fees paid for IT projects.
PEGASUS SOLUTIONS, INC.
RECONCILIATION OF CERTAIN RECLASSIFICATIONS AND NON-RECURRING ITEMS
($ IN THOUSANDS)
(UNAUDITED)
NOTE:
- -----
Historically, certain reimbursable expenses, primarily GDS fees, the company pays on behalf of and subsequently
bills to its customers, have been recorded as a reduction to revenue. Under current accounting rules that went
into effect in 2002, these amounts should be recorded as revenue with a corresponding amount recorded as
expense. All 2002 and 2001 financial results have been reclassified to conform to this required presentation.
These reclassifications had no impact on the company's net loss, net loss per share, cash earnings per share
or EBITDA. However, EBITDA as a percent of revenue, or EBITDA margin, decreased slightly as a result of these
reclassifications. The following table illustrates these reclassifications as well as non-recurring items that
affected the presentation of the company's financial statements.
YEAR ENDED YEAR ENDED
DECEMBER 31, 2002 DECEMBER 31, 2001
----------------- -----------------
AS REPORTED RECLASSES REVISED AS REPORTED RECLASSES REVISED
------------- ----------- --------- ------------- ----------- ---------
Technology revenue - as reported $ 111,657 $ - $111,657 $ 106,451 $ - $106,451
Hilton termination fee (3,534) - (3,534) - - -
Customer reimbursements - 5,729 5,729 - 5,765 5,765
Other - 3,041 3,041 - 706 706
------------- ----------- --------- ------------- ----------- ---------
Technology revenue - as revised $ 108,123 $ 8,770 $116,893 $ 106,451 $ 6,471 $112,922
------------- ----------- --------- ------------- ----------- ---------
Hospitality revenue - as reported 64,071 - 64,071 73,511 - 73,511
Customer reimbursements - 5,452 5,452 - 6,314 6,314
------------- ----------- --------- ------------- ----------- ---------
Hospitality revenue - as revised 64,071 5,452 69,523 73,511 6,314 79,825
------------- ----------- --------- ------------- ----------- ---------
CONSOLIDATED REVENUE $ 172,194 $ 14,222 $186,416 $ 179,962 $ 12,785 $192,747
============= =========== ========= ============= =========== =========
CONSOLIDATED OPERATING EXPENSES $ 182,718 $ 14,222 $196,940 $ 226,231 $ 12,785 $239,016
============= =========== ========= ============= =========== =========
CONSOLIDATED NET LOSS $ (3,519) $ - $ (3,519) $ (29,737) $ - $(29,737)
============= =========== ========= ============= =========== =========
Technology EBITDA - as reported 27,677 - 27,677 18,229 - 18,229
Hilton termination fee (3,534) - (3,534) - - -
Non-recurring items1 - - - 5,113 - 5,113
------------- ----------- --------- ------------- ----------- ---------
TECHNOLOGY EBITDA - AS REVISED 24,143 - 24,143 23,342 - 23,342
------------- ----------- --------- ------------- ----------- ---------
Technology EBITDA margin % 22.3% -1.7% 20.7% 21.9% -1.3% 20.7%
Hospitality EBITDA - as reported 13,410 - 13,410 1,153 - 1,153
Non-recurring items1 - - - 5,830 - 5,830
------------- ----------- --------- ------------- ----------- ---------
HOSPITALITY EBITDA - AS REVISED 13,410 - 13,410 6,983 - 6,983
------------- ----------- --------- ------------- ----------- ---------
Hospitality EBITDA margin % 20.9% -1.6% 19.3% 9.5% -0.8% 8.7%
CONSOLIDATED EBITDA - AS REVISED $ 37,553 $ - $ 37,553 $ 30,325 $ - $ 30,325
============= =========== ========= ============= =========== =========
Consolidated EBITDA margin % 21.8% -1.7% 20.1% 16.9% -1.1% 15.7%
<FN>
FOOTNOTE:
- ---------
1 - Non-recurring items excluded from 2001 Technology and Hospitality EBITDAs included restructuring and
associated charges and external consulting fees paid for IT projects.
PEGASUS SOLUTIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
DECEMBER 31,
2002 2001
--------- ---------
ASSETS
Cash and cash equivalents $ 19,893 $ 13,438
Short-term investments 4,033 9,167
Accounts receivable, net 25,886 29,228
Other current assets 8,368 5,309
--------- ---------
Total current assets 58,180 57,142
Intangible assets, net 6,013 32,505
Property and equipment, net 71,442 67,365
Goodwill, net 139,533 136,921
Other noncurrent assets 12,927 11,735
--------- ---------
Total assets $288,095 $305,668
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 26,574 $ 39,203
Unearned income 7,812 8,585
Deferred tax liability - 12,301
Customer deposits 3,031 2,170
Other current liabilities 3,768 424
--------- ---------
Total current liabilities 41,185 62,683
Uncleared commission checks 4,641 4,004
Other noncurrent liabilities 14,673 7,780
Commitments and contingencies - -
Stockholders' equity:
Common stock 255 251
Additional paid-in capital 295,513 290,444
Unearned compensation (571) (34)
Accumulated comprehensive gain 1 21
Accumulated deficit (59,757) (56,238)
Less treasury stock at cost (7,845) (3,243)
--------- ---------
Total stockholders' equity 227,596 231,201
--------- ---------
Total liabilities and stockholders' equity $288,095 $305,668
========= =========