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  John Q. Hammons Hotels, Inc. Reports Profit for First Half of 2003; RevPAR for the Six Months Equal to  Prior Year's
Hotel Operating Statistics
.
SPRINGFIELD, Mo.-- Aug. 12, 2003 -- John Q. Hammons Hotels, Inc. (AMEX:JQH) today reported on its second quarter 2003 results.

Year-to-Date Results

Basic earnings per share for the six months ended July 4, 2003 were $0.06, compared to a loss per share of ($0.15) for the six months ended June 28, 2002. Net income for the six months ended July 4, 2003 was $0.3 million, compared to a net loss of ($0.8) million for the same period in 2002. The 2002 six months included a charge of $6.8 million applicable to debt extinguishment costs, primarily related to the refinancing of a significant portion of our long-term debt completed in May of 2002. We produced EBITDA for the six months ended July 4, 2003 of $61.3 million, compared to $65.1 million in the 2002 period (See attached table for reconciliation of net income to EBITDA and for the definition of EBITDA). The decrease was primarily attributable to increases in property insurance, guest frequency program costs and rising natural gas prices.

Total revenues for the 2003 six months were $218.8 million, a decrease of $3.8 million, compared to the same period in 2002. Revenue Per Available Room (RevPAR) was $64.43 for the 2003 six months, virtually equal to the prior year's level of $64.72, while the industry's RevPAR for the first six months of 2003 was down 2.5% from the first half of 2003, to $48.70, as reported by Smith Travel Research.

Second Quarter Results

Basic earnings per share for the three months ended July 4, 2003 were $0.02, compared to a loss per share of ($0.20) for the same period in 2002. Net income was $0.1 million for the 2003 quarter, compared to a loss of ($1.0) million for the 2002 quarter. The 2002 quarter included the debt extinguishment costs discussed above. EBITDA was $30.6 million for the 2003 quarter, down $3.4 million compared to the 2002 second quarter EBITDA of $34.0 million (See attached table for reconciliation of net income to EBITDA and for the definition of EBITDA). The decrease was primarily attributable increases in property insurance, guest frequency program costs and rising natural gas prices.

Total revenues for the 2003 second quarter were $108.7 million, compared to $115.2 million for the 2002 quarter, reflecting the ongoing weakness in the association and corporate group travel segments of the hospitality industry. Our Revenue Per Available Room (RevPAR) was $65.16 for the 2003 second quarter, compared to the prior year's level of $67.58, while the industry's RevPAR for the second quarter of 2003 was down 3.2% compared to the same period in 2002, to $51.31 as reported by Smith Travel Research.

Chairman Comments

"Although the ongoing weakness in the industry has been difficult, our goal of strengthening our balance sheet has helped to improve the financial picture of this company," stated Mr. John Q. Hammons, Chairman and Chief Executive Officer. "We continue to reduce debt and maintain quality service levels, thereby positioning ourselves for the economic and industry recovery."

Financing Activities

We retired a $6.3 million mortgage (Springdale Hampton Inn) at 9.25%, which was due to mature in the fourth quarter of 2003, bringing total debt reduction in the first half of 2003 to $10.1 million. The remaining current portion of long-term debt ($7.7 million) is attributable only to scheduled principal amortization on various individual hotel mortgages.

Operations Outlook

We forecast that the lingering industry weakness will continue throughout the third quarter of 2003, generating year-over-year RevPAR comparable to, or slightly below last year's levels. Despite this weakness, we expect to continue our cash generation and will maintain our focus on operational efficiencies.
 
 

JOHN Q. HAMMONS HOTELS, INC.
AND COMPANIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's omitted, except share data)
                         Three Months Ended         Six Months Ended
                        July 4,      June 28,     July 4,     June 28,
                         2003          2002        2003         2002
                      ------------ -----------  ------------ ----------
 REVENUES:
  Rooms               $   68,959   $   71,551   $  136,362   $ 137,041
  Food and beverage       27,390       30,101       56,529      59,388
  Meeting room rental,
   related party
   management fee
   and other              12,315       13,509       25,903      26,161
                       ----------   ----------   ----------   ---------
     Total revenues      108,664      115,161      218,794     222,590

 OPERATING EXPENSES:
  Direct operating
   costs and expenses:
     Rooms                17,046       17,712       33,326      33,768
     Food and beverage    21,982       23,219       43,888      45,374
     Other                   701          896        1,393       1,605

  General, administrative,
   sales and
   management expenses    33,747       34,770       69,822      67,779
  Repairs and
   maintenance             4,585        4,602        9,038       8,957
  Depreciation and
   amortization           12,586       13,096       25,067      26,088
                       ----------   ----------   ----------   ---------

     Total operating
      costs               90,647       94,295      182,534     183,571
                       ----------   ----------   ----------   ---------

 INCOME FROM OPERATIONS  18,017      20,866     36,260    39,019

 OTHER INCOME (EXPENSE):
  Other income                 -            -          175           -
  Interest income            156          194          335         448
  Interest expense and
   amortization of
   deferred financing
   fees                  (17,595)     (18,232)     (35,207)    (35,484)
  Extinguishment of
   debt costs                  -       (6,792)           -      (6,792)
                       ----------   ----------   ----------   ---------
 

 INCOME (LOSS) BEFORE
  MINORITY INTEREST
  AND PROVISION
  FOR INCOME TAXES           578       (3,964)       1,563      (2,809)
  Minority interest in
   (earnings) loss of
   partnership              (439)       3,011       (1,187)      2,134
                       ----------   ----------   ----------   ---------

 INCOME (LOSS) BEFORE
  PROVISION FOR INCOME
  TAXES                      139         (953)         376        (675)
  Provision for income
   taxes                     (60)         (60)         (90)        (90)
                       ----------   ----------   ----------   ---------

 NET INCOME (LOSS)
  ALLOCABLE TO THE
  COMPANY             $       79   $   (1,013)  $      286   $    (765)
                       ==========   ==========   ==========   =========

 BASIC EARNINGS (LOSS)
  PER SHARE:
  Net earnings (loss)
   allocable to
   Company            $     0.02   $    (0.20)  $     0.06   $   (0.15)
                       ==========   ==========   ==========   =========

 BASIC WEIGHTED
  AVERAGE SHARES
  OUTSTANDING          5,089,728    5,081,008    5,086,778    5,078,644
                       ==========   ==========   ==========   =========

 DILUTED EARNINGS
  (LOSS) PER SHARE:
  Net earnings (loss)
   allocable to
   Company            $     0.01   $    (0.20)  $     0.05   $   (0.15)
                       ==========   ==========   ==========   =========

 DILUTED  WEIGHTED
  AVERAGE SHARES
  OUTSTANDING          5,372,627    5,081,008    5,369,677    5,078,644
                       ==========   ==========   ==========   =========
 
 

                      JOHN Q. HAMMONS HOTELS, INC.
                              AND COMPANIES
   (Amounts in thousands except earnings per share and operating data)

                                  Three Months Ended  Six Months Ended
                                   July 4,  June 28,   July 4, June 28,
                                    2003     2002       2003     2002
                                  -------- ---------  -------- --------

 Reconciliation of Net Income to
  EBITDA:
 Net Income (Loss)                $    79   ($1,013)  $   286    ($765)
 Provision for income taxes            60        60        90       90
 Minority interest in earnings
  (loss) of partnership               439    (3,011)    1,187   (2,134)
 Extinguishment of debt costs           0     6,792         0    6,792
 Interest expense and
  amortization of deferred
  financing fees                   17,595    18,232    35,207   35,484
 Interest income                     (156)     (194)     (335)    (448)
 Other income                           0         0      (175)       0
 Depreciation and amortization     12,586    13,096    25,067   26,088
                                   -------  --------   -------  -------
 EBITDA (a)                       $30,603  $ 33,962   $61,327  $65,107
                                   =======  ========   =======  =======
 EBITDA Margin (% of Total
  Revenue)                           28.2%     29.5%     28.0%    29.2%
 (a) EBITDA is defined as income before interest income and expense, income tax expense, depreciation and amortization, minority interest, extinguishment of debt costs and other income.  Management considers EBITDA to be one measure of operating performance for the Company before debt service that provides a relevant basis for comparison, and EBITDA is presented to assist investors in analyzing the performance of the Company. This information should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States, nor should it be considered as an indicator of the overall financial performance of the Company. The Company's calculation of EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited.

Three Months Ended  Six Months Ended
                                   July 4,  June 28,   July 4, June 28,
                                    2003     2002       2003     2002
                                  -------- ---------  -------- --------
 Total Owned Hotels:
 Occupancy                          65.7%    68.2%      64.2%    65.3%
 Average Room Rate                 $99.21   $99.11    $100.29   $99.11
 RevPAR (Room Revenue per
  available room)                  $65.16   $67.58     $64.43   $64.72
 

                                         July 4,    Jan. 3,   Dec. 28,
                                          2003       2003       2001
                                       ----------  --------- ----------
 Selected Balance Sheet Data
 Current Assets                         $ 60,489   $ 52,020   $ 60,673

 Total Assets                           $851,433   $859,972   $881,724

 Current Liabilities Excluding Debt     $ 40,628   $ 40,789   $ 45,072

 Current Portion of Long-Term Debt      $  7,734   $ 13,683   $ 38,862

 Total Long-Term Debt Including
  Current Portion                       $796,205   $806,342   $813,007
 Total Cash and Equivalents, Restricted
  Cash and Marketable Securities        $ 48,558   $ 35,358   $ 44,196

 Net Debt                               $747,647   $770,984   $768,811


 

John Q. Hammons Hotels, Inc. owns 47 hotels located in 20 states, containing 11,629 guest rooms or suites, and manage 11 additional hotels located in seven states, containing 2,623 guest rooms or suites. The majority of these 58 hotels operate under the Embassy Suites, Holiday Inn and Marriott trade names. Most of our hotels are located near a state capitol, university, convention center, corporate headquarters, office park or other stable demand generator.

This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, regarding, among other things, our operations outlook, business strategy, prospects and financial position. 


 
Contact:
John Q. Hammons Hotels, Inc.
Paul Muellner, 417-864-4300
Also See: John Q. Hammons Hotels Reports Net Loss of $1,013,000 for 2002 2nd Qtr; RevPAR Down 0.9% Compared to 2001 2nd Qtr / Aug 2002
John Q. Hammons Hotels, Inc. Reports Net loss for Year Ending 2002 of $2.8 million, Compared to a Loss of $3.1 million In 2001 / Feb 2003


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