For the third quarter, income from hotel operations (hotel operating revenues less hotel and related corporate operating expenses and hotel opening costs) was $13.2 million, compared to $6.0 million for the same 1998 period.  Net income before dividends to preferred stockholders totaled $2.1 million for the third quarter of 1999 compared to $1.0 million in 1998. Net income to common stockholders for the three months ended September 30, 1999, after preferred stock dividends, was one cent per share, compared to a per share loss of 10 cents for the same quarter in 1998.

For the quarter, the Company reported total hotel operating revenues of $30.1 million, compared to $14.2 million in the third quarter of 1998, an increase of 112 percent, primarily driven by the larger number of properties open. The company operated 64 hotels as of September 30, 1999, compared to 38 at September 30, 1998. At the end of the third quarter, the company also had 10 franchised hotels open compared with seven on September 30, 1998.  Comparing the operating results for the third quarter of 1999 to the third quarter of 1998, revenue per available room (�RevPAR�) increased 10 percent to $42.13 and the average daily rate rose 7.6 percent to $58.39. The average occupancy for the third quarter of 1999 was 72.1 percent, compared to 70.6 percent for the third quarter of 1998. The third quarter marked the seventh consecutive quarter of double-digit growth in RevPAR for Candlewood.

�We are pleased with the progress we are making throughout the company and are particularly excited with the results from our accelerated franchising program and the initial results from our development agreement with Boston Capital,� said Jack P. DeBoer, Candlewood�s Chairman and Chief Executive Officer. Since July 1, we have received 15 franchise applications and have entered into eight agreements. Our agreement with Boston Capital has enabled us to start construction on six additional hotels.�

�RevPAR growth increased at a double-digit rate for the seventh consecutive quarter, exceeding the market due to a combination of maturation of some locations, good yield-management and greater brand awareness.� DeBoer continued, �while the third quarter financial results were somewhat more positive than we anticipated, much of the improvement can be attributed to timing issues which impacted our net interest expense and slightly lower than expected operating expenses.�

Total hotel operating revenues for the nine month period ended September 30, 1999, totaled $78.7 million, compared to $31.8 million for the nine months ended September 30, 1998.  Comparing the operating results for the nine-month periods September 30, 1999 and 1998, RevPAR was $39.68 compared to $36.36. Income from hotel operations for the nine months ended September 30, 1999 increased 160 percent to $30.4 million, compared to $11.7 million for the same 1998 period. Net loss to common stockholders for the nine months ended September 30, 1999, after preferred stock dividends, was 64 cents per share, compared to a per share loss of 23 cents for the nine months ended September 30, 1998.

Candlewood opened one Company-operated hotel in the third quarter, increasing the system to 64 company-operated and 10 franchised properties at September 30, 1999. Twelve properties, (three company owned, six joint venture, and three franchised properties) were under construction as of September 30, 1999.  Candlewood Suites is targeted to value-oriented business travelers, and features large studio and one-bedroom suites with high quality furnishings and fully equipped kitchens. Room rates range from $55 to $95 per night for studio suites and $75 to $115 per night for one-bedroom suites, depending on market location and length of stay.  The Company was founded in late 1995.