SILVER SPRING, Md., April 28, 2011 /PRNewswire/ -- Choice Hotels International, Inc., (NYSE: CHH) today reported the following highlights for first quarter 2011:
-- Adjusted diluted earnings per share ("EPS") for first quarter 2011 were
$0.28 compared to $0.27 for the same period of the prior year. Diluted
EPS were $0.26 for first quarter 2011 compared to $0.26 for first
quarter 2010. Adjusted diluted EPS for first quarter 2011 and 2010
exclude certain special items, as described below, totaling $0.02 and
$0.01, respectively.
-- Excluding special items, adjusted earnings before interest, taxes,
depreciation and amortization ("EBITDA") were $27.8 million for the
three months ended March 31, 2011, compared to $26.4 million for the
same period of 2010. Operating income increased 8% from $23.8 million
for the three months ended March 31, 2010 to $25.7 million for the same
period of the current year.
-- Franchising revenues increased 8% from $47.7 million for the three
months ended March 31, 2010 to $51.5 million for the same period of
2011. Total revenues for the three months ended March 31, 2011
increased 7% to $115.3 million compared to the same period of 2010.
-- The effective income tax rate for the three months ended March 31, 2011
was 28.2% compared to 35.9% for the same period of the prior year.
Excluding certain discrete items totaling $1.3 million (approximately
$0.02 diluted earnings per share) recorded during the three months ended
March 31, 2011, the company's effective income tax rate was 34.4%.
-- Domestic unit and room growth increased 1.3 percent and 0.8 percent,
respectively, from March 31, 2010.
-- Domestic system-wide revenue per available room ("RevPAR") increased
5.5% for the first quarter of 2011 compared to the same period of 2010.
-- The effective royalty rate increased 3 basis points to 4.35% for the
three months ended March 31, 2011 compared to 4.32% for the same period
of the prior year.
-- The company executed 56 new domestic hotel franchise contracts for the
three months ended March 31, 2011 compared to 55 contracts executed in
the same period of the prior year.
-- The number of domestic hotels under construction, awaiting conversion or
approved for development declined 23% from March 31, 2010 to 508 hotels
representing 41,475 rooms; the worldwide pipeline declined 20% from
March 31, 2010 to 606 hotels representing 49,908 rooms.
"While the franchise development environment remained challenging during the first quarter, we are pleased with our continued growth in domestic RevPAR, domestic net units and rooms and key financial metrics," said Stephen P. Joyce, president and chief executive officer. "As the domestic RevPAR and hotel transaction environments continue to improve, Choice remains a top option for hotel developers thanks to our formidable position as the premier lodging franchisor in the mid-scale and economy segments with a mix of well-segmented, well-known brands suitable for new construction and conversion development opportunities."
Special Items
During the three months ended March 31, 2011 and 2010, the company recorded employee termination benefits in selling, general and administrative expenses of approximately $0.1 million and $0.4 million, respectively. In addition, during the three months ended March 31, 2011, the company reduced the carrying amount of a parcel of land held for sale resulting in a loss of $1.8 million included in other gains and losses. These amounts represented diluted EPS of $0.02 and $0.01 for the three months ended March 31, 2011 and 2010, respectively.
Outlook for 2011
The company's second quarter 2011 diluted EPS is expected to be at least $0.43. The company expects full-year 2011 adjusted diluted EPS to be between $1.73 and $1.75. Adjusted EBITDA for full-year 2011 are expected to be between $177 million and $179 million. These estimates include the following assumptions:
-- The company expects net domestic unit growth to be relatively flat in
2011;
-- RevPAR is expected to increase approximately 5% for the second quarter
of 2011 and increase approximately 4% for full-year 2011;
-- The effective royalty rate is expected to increase 1 basis points for
full-year 2011;
-- All figures assume the existing share count and an effective tax rate of
34.5% and 33.5% for the second quarter and full-year 2011, respectively;
-- Adjusted EBITDA for the full year 2011 excludes $0.1 million of
operating expenses related to employee termination benefits. Adjusted
diluted EPS excludes the aforementioned employee termination benefits as
well as a $1.8 million loss on land held for sale which together
represent approximately $0.02 diluted EPS for full year 2011.
Use of Free Cash Flow
The company has historically used its free cash flow (cash flow from operations less capital expenditures) to return value to shareholders, primarily through share repurchases and dividends.
For the three months ended March 31, 2011 the company paid $11.0 million of cash dividends to shareholders. The current quarterly dividend rate per common share is $0.185, subject to declaration by our board of directors.
During the three months ended March 31, 2011, the company did not purchase shares of its common stock under the share repurchase program but still has authorization to purchase up to an additional 3.6 million shares under this program. We expect to continue making repurchases in the open market and through privately negotiated transactions, subject to market and other conditions. No minimum number of share repurchases has been fixed. Since Choice announced its stock repurchase program on June 25, 1998, the company has repurchased 43.2 million shares of its common stock for a total cost of $1 billion through March 31, 2011. Considering the effect of a two-for-one stock split in October 2005, the company had repurchased 76.2 million shares through March 31, 2011 under the share repurchase program at an average price of $13.35 per share.
Our board of directors previously authorized us to enter into programs which permit us to offer financing, investment and guaranty support to qualified franchisees as well as to acquire and resell real estate to incent franchise development for certain brands in top markets. Over the next several years, we expect to continue to opportunistically deploy capital pursuant to these programs to promote growth of our emerging brands. The amount and timing of the investment in these programs will be dependent on market and other conditions. Our current expectation is that our annual investment in these programs will range between $20 million to $40 million. Notwithstanding these programs, the company expects to continue to return value to its shareholders through a combination of share repurchases and dividends, subject to market and other conditions.
Conference Call
Choice will conduct a conference call on Friday, April 29, 2011 at 10:00 a.m. EDT to discuss the company's first quarter 2011 results. The dial-in number to listen to the call is 1-866-356-4123, and the access code is 79940540. International callers should dial 1-617-597-5393 and enter the access code 79940540. The conference call also will be Webcast simultaneously via the company's Web site, www.choicehotels.com. Interested investors and other parties wishing to access the call via the Webcast should go to the Web site and click on the Investor Info link. The Investor Information page will feature a conference call microphone icon to access the call.
The call will be recorded and available for replay beginning at 1:00 p.m. EDT on April 29, 2011 through May 29, 2011 by calling 1-888-286-8010 and entering access code 21425981. The international dial-in number for the replay is 1-617-801-6888, access code 21425981. In addition, the call will be archived and available on www.choicehotels.com via the Investor Info link.
About Choice Hotels
Choice Hotels International, Inc. franchises more than 6,100 hotels, representing more than 490,000 rooms, in the United States and more than 30 other countries and territories. As of March 31, 2011, more than 500 hotels were under construction, awaiting conversion or approved for development in the United States, representing more than 40,000 rooms, and approximately 100 hotels, representing approximately 8,400 rooms, were under construction, awaiting conversion or approved for development in more than 20 other countries and territories. The company's Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge and Rodeway Inn brands serve guests worldwide. In addition, via its Ascend Collection membership program, travelers in the United States, Canada and the Caribbean have upscale lodging options at historic, boutique and unique hotels.
Additional corporate information may be found on the Choice Hotels International, Inc. Web site, which may be accessed at www.choicehotels.com.
Forward-Looking Statements
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the federal securities law. Generally, our use of words such as "expect," "estimate," "believe," "anticipate," "will," "forecast," "plan," project," "assume" or similar words of futurity identify statements that are forward-looking and that we intend to be included within the Safe Harbor protections provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are based on management's current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of the company's revenue, earnings and other financial and operational measures, company debt levels, payment of stock dividends, and future operations, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.
Several factors could cause actual results, performance or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, domestic and foreign economic conditions; operating risks common in the lodging and franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in technology utilized for reservations systems and other operating systems; fluctuations in the supply and demand for hotels rooms; and our ability to manage effectively our indebtedness. These and other risk factors are discussed in detail in the Risk Factors section of the company's Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission on March 1, 2011. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Statement Concerning Non-GAAP Financial Measurements
Adjusted diluted EPS, adjusted EBITDA, adjusted SG&A, franchising revenues and adjusted franchising margins are non-GAAP financial measurements. 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 (GAAP), such as diluted earnings per share, operating income, total revenues and operating margins. The company's calculation of these measurements may be different from the calculations used by other companies and therefore comparability may be limited. The company has included an exhibit accompanying this release that reconciles these measures to the comparable GAAP measurement. We discuss management's reasons for reporting these non-GAAP measures below.
Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA reflects earnings excluding the impact of interest expense, tax expense, depreciation and amortization. Our management considers EBITDA to be an indicator of operating performance because it can be used to measure our ability to service debt, fund capital expenditures, and expand our business. EBITDA is a commonly used measure of performance in our industry. In addition, it is used by analysts, lenders, investors and others, as well as by us, to facilitate comparisons between the company and its competitors because it excludes certain items that can vary widely across different industries or among companies within the same industry.
Franchising Revenues and Margins: The company reports franchising revenues and margins which exclude marketing and reservation revenues and hotel operations. Marketing and reservation activities are excluded from revenues and operating margins since the company is contractually required by its franchise agreements to use these fees collected for marketing and reservation activities. Cumulative reservation and marketing fees not expended are recorded as a payable on the company's financial statements and are carried over to the next fiscal year and expended in accordance with the franchise agreements. Cumulative marketing and reservation expenditures in excess of fees collected for marketing and reservation activities are recorded as a receivable on the company's financial statements. In addition, the company has the contractual authority to require that the franchisees in the system at any given point repay the company for any deficits related to marketing and reservation activities. Hotel operations are excluded since they do not reflect the most accurate measure of the company's core franchising business. These non-GAAP measures are a commonly used measure of performance in our industry and facilitate comparisons between the company and its competitors.
Adjusted Diluted EPS, Adjusted EBITDA, Adjusted SG&A and Adjusted Franchising Margins: The company's management also uses adjusted diluted EPS, adjusted EBITDA, adjusted SG&A and adjusted franchising margins which exclude employee termination benefits for the three months ended March 31, 2011 and 2010 as well as a reduction in the carrying amount of land held for sale during the three months ended March 31, 2011. The company utilizes these non-GAAP measures to enable investors to perform meaningful comparisons of past, present and future operating results and as a means to emphasize the results of on-going operations.
Choice Hotels, Choice Hotels International, Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge, Rodeway Inn and Ascend Collection are proprietary trademarks and service marks of Choice Hotels International.
© 2011 Choice Hotels International, Inc. All rights reserved.
Exhibit 1
Choice Hotels International, Inc.
Consolidated Statements of Income
(Unaudited)
Three Months Ended March 31,
----------------------------
Variance
2011 2010 $ %
---- ---- --- ---
(In thousands,
except per share
amounts)
REVENUES:
Royalty fees $44,240 $41,021 $3,219 8%
Initial franchise
and relicensing
fees 2,614 1,912 702 37%
Procurement
services 3,165 3,245 (80) (2%)
Marketing and
reservation 62,967 58,840 4,127 7%
Hotel operations 864 867 (3) (0%)
Other 1,431 1,536 (105) (7%)
----- ----- ---- ----
Total revenues 115,281 107,421 7,860 7%
OPERATING
EXPENSES:
Selling, general
and
administrative 23,847 21,816 2,031 9%
Depreciation and
amortization 1,955 2,172 (217) (10%)
Marketing and
reservation 62,967 58,840 4,127 7%
Hotel operations 833 756 77 10%
--- --- --- ---
Total operating
expenses 89,602 83,584 6,018 7%
Operating income 25,679 23,837 1,842 8%
OTHER INCOME AND
EXPENSES:
Interest expense 3,224 621 2,603 419%
Interest income (210) (60) (150) 250%
Other (gains) and
losses 1,043 (1,017) 2,060 (203%)
Equity in net
income of
affiliates (301) (353) 52 (15%)
Total other income
and expenses, net 3,756 (809) 4,565 (564%)
----- ---- ----- ------
Income before
income taxes 21,923 24,646 (2,723) (11%)
Income taxes 6,193 8,853 (2,660) (30%)
----- ----- ------ -----
Net income $15,730 $15,793 $(63) (0%)
======= ======= ==== ====
Basic earnings per
share $0.26 $0.27 $(0.01) (4%)
===== ===== ====== ====
Diluted earnings
per share $0.26 $0.26 $- 0%
===== ===== === ===
Exhibit 2
Choice Hotels International, Inc.
Consolidated Balance Sheets
(In thousands, except per share December
amounts) March 31, 31,
2011 2010
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $76,405 $91,259
Accounts receivable, net 48,279 47,638
Deferred income taxes 429 429
Other current assets 22,755 24,256
------ ------
Total current assets 147,868 163,582
Fixed assets and intangibles, net 140,300 142,528
Receivable --marketing and reservation
fees 54,719 42,507
Investments, employee benefit plans, at
fair value 24,728 23,365
Other assets 44,758 39,740
------ ------
Total assets $412,373 $411,722
-------- --------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable and accrued expenses $67,693 $88,986
Deferred revenue 72,039 67,322
Deferred compensation & retirement plan
obligations 2,573 2,552
Current portion of long-term debt 508 420
Revolving credit facility - 200
Other current liabilities 6,928 5,778
----- -----
Total current liabilities 149,741 165,258
Long-term debt 260,007 251,554
Deferred compensation & retirement plan
obligations 34,660 35,707
Other liabilities 16,995 17,274
------ ------
Total liabilities 461,403 469,793
------- -------
Common stock, $0.01 par value 598 596
Additional paid-in-capital 92,019 92,774
Accumulated other comprehensive loss (6,482) (7,192)
Treasury stock, at cost (867,960) (872,306)
Retained earnings 732,795 728,057
------- -------
Total shareholders' deficit (49,030) (58,071)
------- -------
Total liabilities and shareholders'
deficit $412,373 $411,722
-------- --------
Exhibit 3
Choice Hotels International, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
(In thousands) March 31,
------------------
2011 2010
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $15,730 $15,793
Adjustments to reconcile net income to net cash
provided (used)
by operating activities:
Depreciation and amortization 1,955 2,172
Provision for bad debts 778 856
Non-cash stock compensation and other charges 4,513 2,670
Non-cash interest and other (income) loss (350) (987)
Equity in net income of affiliates (301) (353)
Changes in assets and liabilities, net of
acquisitions:
Receivables (1,250) (435)
Receivable -marketing and reservation fees, net (8,979) (10,909)
Accounts payable (1,775) 3,294
Accrued expenses (18,931) (10,611)
Income taxes payable/receivable 1,182 4,667
Deferred income taxes (12) (65)
Deferred revenue 4,709 9,138
Other assets (1,147) (6,898)
Other liabilities (1,339) (1,352)
------ ------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES (5,217) 6,980
------ -----
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property and equipment (1,835) (4,558)
Equity method investments (1,600) -
Acquisitions, net of cash acquired - (466)
Purchases of investments, employee benefit plans (897) (1,104)
Proceeds from sales of investments, employee
benefit plans 310 522
Issuance of notes receivable (1,477) (534)
Collections of notes receivable 7 10
Other items, net (95) (124)
--- ----
NET CASH USED IN INVESTING ACTIVITIES (5,587) (6,254)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings pursuant to revolving credit
facilities 7,900 16,200
Repayments of long-term debt (5) -
Purchase of treasury stock (2,207) (8,936)
Dividends paid (10,950) (10,945)
Excess tax benefits from stock-based compensation 834 49
Debt issuance costs (2,207) -
Proceeds from exercise of stock options 2,238 648
----- ---
NET CASH USED IN FINANCING ACTIVITIES (4,397) (2,984)
------ ------
Net change in cash and cash equivalents (15,201) (2,258)
Effect of foreign exchange rate changes on cash
and cash equivalents 347 (19)
Cash and cash equivalents at beginning of period 91,259 67,870
------ ------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $76,405 $65,593
======= =======
Exhibit 4
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL OPERATING INFORMATION
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
For the Three Months Ended
March 31, 2011*
--------------------------
Average
Daily
Rate Occupancy RevPAR
---- --------- ------
Comfort Inn $72.21 44.3% $32.00
Comfort Suites 79.08 47.0% 37.18
Sleep 64.94 42.2% 27.43
Quality 61.58 38.6% 23.80
Clarion 67.72 36.6% 24.75
Econo Lodge 49.61 37.3% 18.49
Rodeway 45.77 38.6% 17.65
MainStay 60.97 53.9% 32.85
Suburban 38.29 60.7% 23.24
Ascend Collection 98.46 49.9% 49.09
----- ---- -----
Total $65.69 42.0% $27.58
====== ==== ======
For the Quarter
Ended*
----------------
3/31/2011 3/31/2010
System-wide effective royalty
rate 4.35% 4.32%
For the Three Months Ended
March 31, 2010*
--------------------------
Average
Daily
Rate Occupancy RevPAR
---- --------- ------
Comfort Inn $71.02 42.8% $30.36
Comfort Suites 79.21 43.7% 34.64
Sleep 64.76 41.2% 26.67
Quality 61.59 37.0% 22.77
Clarion 69.45 33.6% 23.32
Econo Lodge 49.58 35.6% 17.65
Rodeway 45.44 36.3% 16.51
MainStay 63.11 52.1% 32.86
Suburban 37.22 58.8% 21.89
Ascend Collection 97.33 42.3% 41.21
----- ---- -----
Total $65.22 40.1% $26.13
====== ==== ======
System-wide effective royalty
rate
Change
------
Average
Daily
Rate Occupancy RevPAR
---- --------- ------
Comfort Inn 1.7% 150 bps 5.4%
Comfort Suites (0.2%) 330 bps 7.3%
Sleep 0.3% 100 bps 2.8%
Quality (0.0%) 160 bps 4.5%
Clarion (2.5%) 300 bps 6.1%
Econo Lodge 0.1% 170 bps 4.8%
Rodeway 0.7% 230 bps 6.9%
MainStay (3.4%) 180 bps (0.0%)
Suburban 2.9% 190 bps 6.2%
Ascend Collection 1.2% 760 bps 19.1%
--- --- --- ----
Total 0.7% 190 bps 5.5%
=== === === ===
System-wide effective royalty
rate
* Operating statistics represent hotel operations from December
through February
Exhibit 5
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA
(UNAUDITED)
March 31, 2011 March 31, 2010
-------------- --------------
Hotels Rooms Hotels Rooms
------ ----- ------ -----
Comfort Inn 1,422 110,932 1,445 113,266
Comfort Suites 621 48,096 620 48,180
Sleep 397 28,895 389 28,377
Quality 1,015 88,967 976 88,394
Clarion 192 28,259 168 24,336
Econo Lodge 779 48,245 786 48,519
Rodeway 381 20,940 373 21,118
MainStay 38 2,943 36 2,797
Suburban 63 7,543 62 7,474
Ascend Collection 42 3,259 30 2,459
Cambria Suites 20 2,328 20 2,326
--- ----- --- -----
Domestic Franchises 4,970 390,407 4,905 387,246
International
Franchises 1,158 102,326 1,127 100,018
----- ------- ----- -------
Total Franchises 6,128 492,733 6,032 487,264
===== ======= ===== =======
Variance
--------
Hotels Rooms % %
------ ----- --- ---
Comfort Inn (23) (2,334) (1.6%) (2.1%)
Comfort Suites 1 (84) 0.2% (0.2%)
Sleep 8 518 2.1% 1.8%
Quality 39 573 4.0% 0.6%
Clarion 24 3,923 14.3% 16.1%
Econo Lodge (7) (274) (0.9%) (0.6%)
Rodeway 8 (178) 2.1% (0.8%)
MainStay 2 146 5.6% 5.2%
Suburban 1 69 1.6% 0.9%
Ascend Collection 12 800 40.0% 32.5%
Cambria Suites - 2 0.0% 0.1%
--- --- --- ---
Domestic Franchises 65 3,161 1.3% 0.8%
International
Franchises 31 2,308 2.8% 2.3%
--- ----- --- ---
Total Franchises 96 5,469 1.6% 1.1%
=== ===== === ===
Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL INFORMATION BY BRAND
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS
(UNAUDITED)
For the Three Months Ended
March 31, 2011
--------------------------
New
Construction Conversion Total
------------ ---------- -----
Comfort Inn 2 7 9
Comfort Suites - 2 2
Sleep 2 - 2
Quality - 24 24
Clarion - 5 5
Econo Lodge - 6 6
Rodeway - 5 5
MainStay 1 - 1
Suburban - - -
Ascend Collection - 1 1
Cambria Suites 1 - 1
--- --- ---
Total Domestic System 6 50 56
=== === ===
For the Three Months Ended
March 31, 2010
--------------------------
New
Construction Conversion Total
------------ ---------- -----
Comfort Inn 1 8 9
Comfort Suites 2 - 2
Sleep 2 - 2
Quality 1 11 12
Clarion - 3 3
Econo Lodge - 10 10
Rodeway 1 11 12
MainStay 2 - 2
Suburban 1 - 1
Ascend Collection - 2 2
Cambria Suites - - -
--- --- ---
Total Domestic System 10 45 55
=== === ===
% Change
--------
New
Construction Conversion Total
------------ ---------- -----
Comfort Inn 100% (13%) 0%
Comfort Suites (100%) NM 0%
Sleep 0% NM 0%
Quality (100%) 118% 100%
Clarion NM 67% 67%
Econo Lodge NM (40%) (40%)
Rodeway (100%) (55%) (58%)
MainStay (50%) NM (50%)
Suburban (100%) NM (100%)
Ascend Collection NM (50%) (50%)
Cambria Suites NM NM NM
--- --- ---
Total Domestic System (40%) 11% 2%
===== === ===
Exhibit 7
CHOICE HOTELS INTERNATIONAL, INC.
DOMESTIC HOTEL PIPELINE OF HOTELS UNDER CONSTRUCTION, AWAITING
CONVERSION OR APPROVED FOR DEVELOPMENT
(UNAUDITED)
A hotel in the domestic pipeline does not always result in an open
and operating hotel due to various factors.
March 31, 2011
Units
-----
New
Conversion Construction Total
---------- ------------ -----
Comfort Inn 31 58 89
Comfort Suites 3 117 120
Sleep Inn - 70 70
Quality 47 6 53
Clarion 20 2 22
Econo Lodge 35 2 37
Rodeway 14 2 16
MainStay 2 39 41
Suburban - 20 20
Ascend Collection 4 4 8
Cambria Suites - 32 32
--- --- ---
156 352 508
=== === ===
March 31, 2010
Units
-----
New
Conversion Construction Total
---------- ------------ -----
Comfort Inn 43 81 124
Comfort Suites - 154 154
Sleep Inn 1 115 116
Quality 39 13 52
Clarion 16 6 22
Econo Lodge 39 4 43
Rodeway 33 3 36
MainStay - 39 39
Suburban - 26 26
Ascend Collection 4 4 8
Cambria Suites - 37 37
--- --- ---
175 482 657
=== === ===
Variance
--------
New
Conversion Construction
---------- ------------
Units % Units %
----- --- ----- ---
Comfort Inn (12) (28%) (23) (28%)
Comfort Suites 3 NM (37) (24%)
Sleep Inn (1) (100%) (45) (39%)
Quality 8 21% (7) (54%)
Clarion 4 25% (4) (67%)
Econo Lodge (4) (10%) (2) (50%)
Rodeway (19) (58%) (1) (33%)
MainStay 2 NM - 0%
Suburban - NM (6) (23%)
Ascend Collection - 0% - 0%
Cambria Suites - NM (5) (14%)
--- --- --- -----
(19) (11%) (130) (27%)
=== ===== ==== =====
Variance
--------
Total
-----
Units %
----- ---
Comfort Inn (35) (28%)
Comfort Suites (34) (22%)
Sleep Inn (46) (40%)
Quality 1 2%
Clarion - 0%
Econo Lodge (6) (14%)
Rodeway (20) (56%)
MainStay 2 5%
Suburban (6) (23%)
Ascend Collection - 0%
Cambria Suites (5) (14%)
--- -----
(149) (23%)
==== =====
Exhibit 8
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)
CALCULATION OF FRANCHISING REVENUES AND ADJUSTED FRANCHISING MARGINS
Three Months Ended March
(dollar amounts in thousands) 31,
-------------------------
2011 2010
---- ----
Franchising Revenues:
Total Revenues $115,281 $107,421
Adjustments:
Marketing and reservation revenues (62,967) (58,840)
Hotel operations (864) (867)
Franchising Revenues $51,450 $47,714
======= =======
Franchising Margins:
Operating Margin:
Total Revenues $115,281 $107,421
Operating Income $25,679 $23,837
Operating Margin 22.3% 22.2%
---- ----
Adjusted Franchising Margin:
Franchising Revenues $51,450 $47,714
Operating Income $25,679 $23,837
Employee termination benefits 70 352
Hotel operations (31) (111)
$25,718 $24,078
------- -------
Adjusted Franchising Margins 50.0% 50.5%
==== ====
CALCULATION OF ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE COSTS
Three Months Ended March
(dollar amounts in thousands) 31,
-------------------------
2011 2010
---- ----
Selling, general and administrative costs $23,847 $21,816
Employee termination benefits (70) (352)
Adjusted Selling, General and
Administrative Costs $23,777 $21,464
======= =======
CALCULATION OF ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS
PER SHARE (EPS)
Three Months Ended March
(In thousands, except per share amounts) 31,
-------------------------
2011 2010
---- ----
Net Income $15,730 $15,793
Adjustments:
Loss on land held for sale 1,111 -
Employee termination benefits 44 220
--- ---
Adjusted Net Income $16,885 $16,013
------- -------
Weighted average shares outstanding-
diluted 59,825 59,600
Diluted Earnings Per Share $0.26 $0.26
Adjustments:
Loss on land held for sale 0.02 -
Employee termination benefits - 0.01
--- ----
Adjusted Diluted Earnings Per Share (EPS) $0.28 $0.27
===== =====
Adjusted EBITDA Reconciliation
(in millions)
Full-Year
Q1 2011 Q1 2010 2011
Actuals Actuals Outlook
-------- -------- ----------
Operating Income (per GAAP) $25.7 $23.8 $168.1-$170.1
Employee termination benefits 0.1 0.4 0.1
Depreciation and amortization 2.0 2.2 8.8
Adjusted Earnings before
interest, taxes, depreciation &
amortization (non-GAAP) $27.8 $26.4 $177-$179
===== ===== =========
SOURCE Choice Hotels International, Inc.
SOURCE: Choice Hotels International, Inc.
PR Newswire
SILVER SPRING, Md., April 28, 2011
SILVER SPRING, Md., April 28, 2011 /PRNewswire/ -- Choice Hotels International, Inc., (NYSE: CHH) today reported the following highlights for first quarter 2011:
"While the franchise development environment remained challenging during the first quarter, we are pleased with our continued growth in domestic RevPAR, domestic net units and rooms and key financial metrics," said Stephen P. Joyce, president and chief executive officer. "As the domestic RevPAR and hotel transaction environments continue to improve, Choice remains a top option for hotel developers thanks to our formidable position as the premier lodging franchisor in the mid-scale and economy segments with a mix of well-segmented, well-known brands suitable for new construction and conversion development opportunities."
Special Items
During the three months ended March 31, 2011 and 2010, the company recorded employee termination benefits in selling, general and administrative expenses of approximately $0.1 million and $0.4 million, respectively. In addition, during the three months ended March 31, 2011, the company reduced the carrying amount of a parcel of land held for sale resulting in a loss of $1.8 million included in other gains and losses. These amounts represented diluted EPS of $0.02 and $0.01 for the three months ended March 31, 2011 and 2010, respectively.
Outlook for 2011
The company's second quarter 2011 diluted EPS is expected to be at least $0.43. The company expects full-year 2011 adjusted diluted EPS to be between $1.73 and $1.75. Adjusted EBITDA for full-year 2011 are expected to be between $177 million and $179 million. These estimates include the following assumptions:
Use of Free Cash Flow
The company has historically used its free cash flow (cash flow from operations less capital expenditures) to return value to shareholders, primarily through share repurchases and dividends.
For the three months ended March 31, 2011 the company paid $11.0 million of cash dividends to shareholders. The current quarterly dividend rate per common share is $0.185, subject to declaration by our board of directors.
During the three months ended March 31, 2011, the company did not purchase shares of its common stock under the share repurchase program but still has authorization to purchase up to an additional 3.6 million shares under this program. We expect to continue making repurchases in the open market and through privately negotiated transactions, subject to market and other conditions. No minimum number of share repurchases has been fixed. Since Choice announced its stock repurchase program on June 25, 1998, the company has repurchased 43.2 million shares of its common stock for a total cost of $1 billion through March 31, 2011. Considering the effect of a two-for-one stock split in October 2005, the company had repurchased 76.2 million shares through March 31, 2011 under the share repurchase program at an average price of $13.35 per share.
Our board of directors previously authorized us to enter into programs which permit us to offer financing, investment and guaranty support to qualified franchisees as well as to acquire and resell real estate to incent franchise development for certain brands in top markets. Over the next several years, we expect to continue to opportunistically deploy capital pursuant to these programs to promote growth of our emerging brands. The amount and timing of the investment in these programs will be dependent on market and other conditions. Our current expectation is that our annual investment in these programs will range between $20 million to $40 million. Notwithstanding these programs, the company expects to continue to return value to its shareholders through a combination of share repurchases and dividends, subject to market and other conditions.
Conference Call
Choice will conduct a conference call on Friday, April 29, 2011 at 10:00 a.m. EDT to discuss the company's first quarter 2011 results. The dial-in number to listen to the call is 1-866-356-4123, and the access code is 79940540. International callers should dial 1-617-597-5393 and enter the access code 79940540. The conference call also will be Webcast simultaneously via the company's Web site, www.choicehotels.com. Interested investors and other parties wishing to access the call via the Webcast should go to the Web site and click on the Investor Info link. The Investor Information page will feature a conference call microphone icon to access the call.
The call will be recorded and available for replay beginning at 1:00 p.m. EDT on April 29, 2011 through May 29, 2011 by calling 1-888-286-8010 and entering access code 21425981. The international dial-in number for the replay is 1-617-801-6888, access code 21425981. In addition, the call will be archived and available on www.choicehotels.com via the Investor Info link.
About Choice Hotels
Choice Hotels International, Inc. franchises more than 6,100 hotels, representing more than 490,000 rooms, in the United States and more than 30 other countries and territories. As of March 31, 2011, more than 500 hotels were under construction, awaiting conversion or approved for development in the United States, representing more than 40,000 rooms, and approximately 100 hotels, representing approximately 8,400 rooms, were under construction, awaiting conversion or approved for development in more than 20 other countries and territories. The company's Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge and Rodeway Inn brands serve guests worldwide. In addition, via its Ascend Collection membership program, travelers in the United States, Canada and the Caribbean have upscale lodging options at historic, boutique and unique hotels.
Additional corporate information may be found on the Choice Hotels International, Inc. Web site, which may be accessed at www.choicehotels.com.
Forward-Looking Statements
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the federal securities law. Generally, our use of words such as "expect," "estimate," "believe," "anticipate," "will," "forecast," "plan," project," "assume" or similar words of futurity identify statements that are forward-looking and that we intend to be included within the Safe Harbor protections provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are based on management's current beliefs, assumptions and expectations regarding future events, which in turn are based on information currently available to management. Such statements may relate to projections of the company's revenue, earnings and other financial and operational measures, company debt levels, payment of stock dividends, and future operations, among other matters. We caution you not to place undue reliance on any such forward-looking statements. Forward-looking statements do not guarantee future performance and involve known and unknown risks, uncertainties and other factors.
Several factors could cause actual results, performance or achievements of the company to differ materially from those expressed in or contemplated by the forward-looking statements. Such risks include, but are not limited to, changes to general, domestic and foreign economic conditions; operating risks common in the lodging and franchising industries; changes to the desirability of our brands as viewed by hotel operators and customers; changes to the terms or termination of our contracts with franchisees; our ability to keep pace with improvements in technology utilized for reservations systems and other operating systems; fluctuations in the supply and demand for hotels rooms; and our ability to manage effectively our indebtedness. These and other risk factors are discussed in detail in the Risk Factors section of the company's Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission on March 1, 2011. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Statement Concerning Non-GAAP Financial Measurements
Adjusted diluted EPS, adjusted EBITDA, adjusted SG&A, franchising revenues and adjusted franchising margins are non-GAAP financial measurements. 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 (GAAP), such as diluted earnings per share, operating income, total revenues and operating margins. The company's calculation of these measurements may be different from the calculations used by other companies and therefore comparability may be limited. The company has included an exhibit accompanying this release that reconciles these measures to the comparable GAAP measurement. We discuss management's reasons for reporting these non-GAAP measures below.
Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA reflects earnings excluding the impact of interest expense, tax expense, depreciation and amortization. Our management considers EBITDA to be an indicator of operating performance because it can be used to measure our ability to service debt, fund capital expenditures, and expand our business. EBITDA is a commonly used measure of performance in our industry. In addition, it is used by analysts, lenders, investors and others, as well as by us, to facilitate comparisons between the company and its competitors because it excludes certain items that can vary widely across different industries or among companies within the same industry.
Franchising Revenues and Margins: The company reports franchising revenues and margins which exclude marketing and reservation revenues and hotel operations. Marketing and reservation activities are excluded from revenues and operating margins since the company is contractually required by its franchise agreements to use these fees collected for marketing and reservation activities. Cumulative reservation and marketing fees not expended are recorded as a payable on the company's financial statements and are carried over to the next fiscal year and expended in accordance with the franchise agreements. Cumulative marketing and reservation expenditures in excess of fees collected for marketing and reservation activities are recorded as a receivable on the company's financial statements. In addition, the company has the contractual authority to require that the franchisees in the system at any given point repay the company for any deficits related to marketing and reservation activities. Hotel operations are excluded since they do not reflect the most accurate measure of the company's core franchising business. These non-GAAP measures are a commonly used measure of performance in our industry and facilitate comparisons between the company and its competitors.
Adjusted Diluted EPS, Adjusted EBITDA, Adjusted SG&A and Adjusted Franchising Margins: The company's management also uses adjusted diluted EPS, adjusted EBITDA, adjusted SG&A and adjusted franchising margins which exclude employee termination benefits for the three months ended March 31, 2011 and 2010 as well as a reduction in the carrying amount of land held for sale during the three months ended March 31, 2011. The company utilizes these non-GAAP measures to enable investors to perform meaningful comparisons of past, present and future operating results and as a means to emphasize the results of on-going operations.
Choice Hotels, Choice Hotels International, Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, Cambria Suites, MainStay Suites, Suburban Extended Stay Hotel, Econo Lodge, Rodeway Inn and Ascend Collection are proprietary trademarks and service marks of Choice Hotels International.
© 2011 Choice Hotels International, Inc. All rights reserved.
|
Exhibit 1 |
||||||||
|
Choice Hotels International, Inc. |
||||||||
|
Consolidated Statements of Income |
||||||||
|
(Unaudited) |
||||||||
|
Three Months Ended March 31, |
||||||||
|
Variance |
||||||||
|
2011 |
2010 |
$ |
% |
|||||
|
(In thousands, except per share amounts) |
||||||||
|
REVENUES: |
||||||||
|
Royalty fees |
$ 44,240 |
$ 41,021 |
$ 3,219 |
8% |
||||
|
Initial franchise and relicensing fees |
2,614 |
1,912 |
702 |
37% |
||||
|
Procurement services |
3,165 |
3,245 |
(80) |
(2%) |
||||
|
Marketing and reservation |
62,967 |
58,840 |
4,127 |
7% |
||||
|
Hotel operations |
864 |
867 |
(3) |
(0%) |
||||
|
Other |
1,431 |
1,536 |
(105) |
(7%) |
||||
|
Total revenues |
115,281 |
107,421 |
7,860 |
7% |
||||
|
OPERATING EXPENSES: |
||||||||
|
Selling, general and administrative |
23,847 |
21,816 |
2,031 |
9% |
||||
|
Depreciation and amortization |
1,955 |
2,172 |
(217) |
(10%) |
||||
|
Marketing and reservation |
62,967 |
58,840 |
4,127 |
7% |
||||
|
Hotel operations |
833 |
756 |
77 |
10% |
||||
|
Total operating expenses |
89,602 |
83,584 |
6,018 |
7% |
||||
|
Operating income |
25,679 |
23,837 |
1,842 |
8% |
||||
|
OTHER INCOME AND EXPENSES: |
||||||||
|
Interest expense |
3,224 |
621 |
2,603 |
419% |
||||
|
Interest income |
(210) |
(60) |
(150) |
250% |
||||
|
Other (gains) and losses |
1,043 |
(1,017) |
2,060 |
(203%) |
||||
|
Equity in net income of affiliates |
(301) |
(353) |
52 |
(15%) |
||||
|
Total other income and expenses, net |
3,756 |
(809) |
4,565 |
(564%) |
||||
|
Income before income taxes |
21,923 |
24,646 |
(2,723) |
(11%) |
||||
|
Income taxes |
6,193 |
8,853 |
(2,660) |
(30%) |
||||
|
Net income |
$ 15,730 |
$ 15,793 |
$ (63) |
(0%) |
||||
|
Basic earnings per share |
$ 0.26 |
$ 0.27 |
$ (0.01) |
(4%) |
||||
|
Diluted earnings per share |
$ 0.26 |
$ 0.26 |
$ - |
0% |
||||
|
Exhibit 2 |
||||||
|
Choice Hotels International, Inc. |
||||||
|
Consolidated Balance Sheets |
||||||
|
(In thousands, except per share amounts) |
March 31, |
December 31, |
||||
|
2011 |
2010 |
|||||
|
(Unaudited) |
||||||
|
ASSETS |
||||||
|
Cash and cash equivalents |
$ 76,405 |
$ 91,259 |
||||
|
Accounts receivable, net |
48,279 |
47,638 |
||||
|
Deferred income taxes |
429 |
429 |
||||
|
Other current assets |
22,755 |
24,256 |
||||
|
Total current assets |
147,868 |
163,582 |
||||
|
Fixed assets and intangibles, net |
140,300 |
142,528 |
||||
|
Receivable -- marketing and reservation fees |
54,719 |
42,507 |
||||
|
Investments, employee benefit plans, at fair value |
24,728 |
23,365 |
||||
|
Other assets |
44,758 |
39,740 |
||||
|
Total assets |
$ 412,373 |
$ 411,722 |
||||
|
LIABILITIES AND SHAREHOLDERS' DEFICIT |
||||||
|
Accounts payable and accrued expenses |
$ 67,693 |
$ 88,986 |
||||
|
Deferred revenue |
72,039 |
67,322 |
||||
|
Deferred compensation & retirement plan obligations |
2,573 |
2,552 |
||||
|
Current portion of long-term debt |
508 |
420 |
||||
|
Revolving credit facility |
- |
200 |
||||
|
Other current liabilities |
6,928 |
5,778 |
||||
|
Total current liabilities |
149,741 |
165,258 |
||||
|
Long-term debt |
260,007 |
251,554 |
||||
|
Deferred compensation & retirement plan obligations |
34,660 |
35,707 |
||||
|
Other liabilities |
16,995 |
17,274 |
||||
|
Total liabilities |
461,403 |
469,793 |
||||
|
Common stock, $0.01 par value |
598 |
596 |
||||
|
Additional paid-in-capital |
92,019 |
92,774 |
||||
|
Accumulated other comprehensive loss |
(6,482) |
(7,192) |
||||
|
Treasury stock, at cost |
(867,960) |
(872,306) |
||||
|
Retained earnings |
732,795 |
728,057 |
||||
|
Total shareholders' deficit |
(49,030) |
(58,071) |
||||
|
Total liabilities and shareholders' deficit |
$ 412,373 |
$ 411,722 |
||||
|
Exhibit 3 |
||||
|
Choice Hotels International, Inc. |
||||
|
Consolidated Statements of Cash Flows |
||||
|
(Unaudited) |
||||
|
(In thousands) |
Three Months Ended March 31, |
|||
|
2011 |
2010 |
|||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
||||
|
Net income |
$ 15,730 |
$ 15,793 |
||
|
Adjustments to reconcile net income to net cash provided (used) |
||||
|
by operating activities: |
||||
|
Depreciation and amortization |
1,955 |
2,172 |
||
|
Provision for bad debts |
778 |
856 |
||
|
Non-cash stock compensation and other charges |
4,513 |
2,670 |
||
|
Non-cash interest and other (income) loss |
(350) |
(987) |
||
|
Equity in net income of affiliates |
(301) |
(353) |
||
|
Changes in assets and liabilities, net of acquisitions: |
||||
|
Receivables |
(1,250) |
(435) |
||
|
Receivable - marketing and reservation fees, net |
(8,979) |
(10,909) |
||
|
Accounts payable |
(1,775) |
3,294 |
||
|
Accrued expenses |
(18,931) |
(10,611) |
||
|
Income taxes payable/receivable |
1,182 |
4,667 |
||
|
Deferred income taxes |
(12) |
(65) |
||
|
Deferred revenue |
4,709 |
9,138 |
||
|
Other assets |
(1,147) |
(6,898) |
||
|
Other liabilities |
(1,339) |
(1,352) |
||
|
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES |
(5,217) |
6,980 |
||
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
||||
|
Investment in property and equipment |
(1,835) |
(4,558) |
||
|
Equity method investments |
(1,600) |
- |
||
|
Acquisitions, net of cash acquired |
- |
(466) |
||
|
Purchases of investments, employee benefit plans |
(897) |
(1,104) |
||
|
Proceeds from sales of investments, employee benefit plans |
310 |
522 |
||
|
Issuance of notes receivable |
(1,477) |
(534) |
||
|
Collections of notes receivable |
7 |
10 |
||
|
Other items, net |
(95) |
(124) |
||
|
NET CASH USED IN INVESTING ACTIVITIES |
(5,587) |
(6,254) |
||
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
||||
|
Net borrowings pursuant to revolving credit facilities |
7,900 |
16,200 |
||
|
Repayments of long-term debt |
(5) |
- |
||
|
Purchase of treasury stock |
(2,207) |
(8,936) |
||
|
Dividends paid |
(10,950) |
(10,945) |
||
|
Excess tax benefits from stock-based compensation |
834 |
49 |
||
|
Debt issuance costs |
(2,207) |
- |
||
|
Proceeds from exercise of stock options |
2,238 |
648 |
||
|
NET CASH USED IN FINANCING ACTIVITIES |
(4,397) |
(2,984) |
||
|
Net change in cash and cash equivalents |
(15,201) |
(2,258) |
||
|
Effect of foreign exchange rate changes on cash and cash equivalents |
347 |
(19) |
||
|
Cash and cash equivalents at beginning of period |
91,259 |
67,870 |
||
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ 76,405 |
$ 65,593 |
||
|
Exhibit 4 |
|||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
|||||||||||||||||||
|
SUPPLEMENTAL OPERATING INFORMATION |
|||||||||||||||||||
|
DOMESTIC HOTEL SYSTEM |
|||||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||||
|
For the Three Months Ended March 31, 2011* |
For the Three Months Ended March 31, 2010* |
Change |
|||||||||||||||||
|
Average Daily |
Average Daily |
Average Daily |
|||||||||||||||||
|
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
|||||||||||
|
Comfort Inn |
$ 72.21 |
44.3% |
$ 32.00 |
$ 71.02 |
42.8% |
$ 30.36 |
1.7% |
150 |
bps |
5.4% |
|||||||||
|
Comfort Suites |
79.08 |
47.0% |
37.18 |
79.21 |
43.7% |
34.64 |
(0.2%) |
330 |
bps |
7.3% |
|||||||||
|
Sleep |
64.94 |
42.2% |
27.43 |
64.76 |
41.2% |
26.67 |
0.3% |
100 |
bps |
2.8% |
|||||||||
|
Quality |
61.58 |
38.6% |
23.80 |
61.59 |
37.0% |
22.77 |
(0.0%) |
160 |
bps |
4.5% |
|||||||||
|
Clarion |
67.72 |
36.6% |
24.75 |
69.45 |
33.6% |
23.32 |
(2.5%) |
300 |
bps |
6.1% |
|||||||||
|
Econo Lodge |
49.61 |
37.3% |
18.49 |
49.58 |
35.6% |
17.65 |
0.1% |
170 |
bps |
4.8% |
|||||||||
|
Rodeway |
45.77 |
38.6% |
17.65 |
45.44 |
36.3% |
16.51 |
0.7% |
230 |
bps |
6.9% |
|||||||||
|
MainStay |
60.97 |
53.9% |
32.85 |
63.11 |
52.1% |
32.86 |
(3.4%) |
180 |
bps |
(0.0%) |
|||||||||
|
Suburban |
38.29 |
60.7% |
23.24 |
37.22 |
58.8% |
21.89 |
2.9% |
190 |
bps |
6.2% |
|||||||||
|
Ascend Collection |
98.46 |
49.9% |
49.09 |
97.33 |
42.3% |
41.21 |
1.2% |
760 |
bps |
19.1% |
|||||||||
|
Total |
$ 65.69 |
42.0% |
$ 27.58 |
$ 65.22 |
40.1% |
$ 26.13 |
0.7% |
190 |
bps |
5.5% |
|||||||||
|
For the Quarter Ended* |
|||||||||||||||||||
|
3/31/2011 |
3/31/2010 |
||||||||||||||||||
|
System-wide effective royalty rate |
4.35% |
4.32% |
|||||||||||||||||
|
* Operating statistics represent hotel operations from December through February |
|||||||||||||||||||
|
Exhibit 5 |
||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
||||||||||||||||
|
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA |
||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||
|
March 31, 2011 |
March 31, 2010 |
Variance |
||||||||||||||
|
Hotels |
Rooms |
Hotels |
Rooms |
Hotels |
Rooms |
% |
% |
|||||||||
|
Comfort Inn |
1,422 |
110,932 |
1,445 |
113,266 |
(23) |
(2,334) |
(1.6%) |
(2.1%) |
||||||||
|
Comfort Suites |
621 |
48,096 |
620 |
48,180 |
1 |
(84) |
0.2% |
(0.2%) |
||||||||
|
Sleep |
397 |
28,895 |
389 |
28,377 |
8 |
518 |
2.1% |
1.8% |
||||||||
|
Quality |
1,015 |
88,967 |
976 |
88,394 |
39 |
573 |
4.0% |
0.6% |
||||||||
|
Clarion |
192 |
28,259 |
168 |
24,336 |
24 |
3,923 |
14.3% |
16.1% |
||||||||
|
Econo Lodge |
779 |
48,245 |
786 |
48,519 |
(7) |
(274) |
(0.9%) |
(0.6%) |
||||||||
|
Rodeway |
381 |
20,940 |
373 |
21,118 |
8 |
(178) |
2.1% |
(0.8%) |
||||||||
|
MainStay |
38 |
2,943 |
36 |
2,797 |
2 |
146 |
5.6% |
5.2% |
||||||||
|
Suburban |
63 |
7,543 |
62 |
7,474 |
1 |
69 |
1.6% |
0.9% |
||||||||
|
Ascend Collection |
42 |
3,259 |
30 |
2,459 |
12 |
800 |
40.0% |
32.5% |
||||||||
|
Cambria Suites |
20 |
2,328 |
20 |
2,326 |
- |
2 |
0.0% |
0.1% |
||||||||
|
Domestic Franchises |
4,970 |
390,407 |
4,905 |
387,246 |
65 |
3,161 |
1.3% |
0.8% |
||||||||
|
International Franchises |
1,158 |
102,326 |
1,127 |
100,018 |
31 |
2,308 |
2.8% |
2.3% |
||||||||
|
Total Franchises |
6,128 |
492,733 |
6,032 |
487,264 |
96 |
5,469 |
1.6% |
1.1% |
||||||||
|
Exhibit 6 |
||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
||||||||||||||||||
|
SUPPLEMENTAL INFORMATION BY BRAND |
||||||||||||||||||
|
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS |
||||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||||
|
For the Three Months Ended March 31, 2011 |
For the Three Months Ended March 31, 2010 |
% Change |
||||||||||||||||
|
New |
New |
New |
||||||||||||||||
|
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
||||||||||
|
Comfort Inn |
2 |
7 |
9 |
1 |
8 |
9 |
100% |
(13%) |
0% |
|||||||||
|
Comfort Suites |
- |
2 |
2 |
2 |
- |
2 |
(100%) |
NM |
0% |
|||||||||
|
Sleep |
2 |
- |
2 |
2 |
- |
2 |
0% |
NM |
0% |
|||||||||
|
Quality |
- |
24 |
24 |
1 |
11 |
12 |
(100%) |
118% |
100% |
|||||||||
|
Clarion |
- |
5 |
5 |
- |
3 |
3 |
NM |
67% |
67% |
|||||||||
|
Econo Lodge |
- |
6 |
6 |
- |
10 |
10 |
NM |
(40%) |
(40%) |
|||||||||
|
Rodeway |
- |
5 |
5 |
1 |
11 |
12 |
(100%) |
(55%) |
(58%) |
|||||||||
|
MainStay |
1 |
- |
1 |
2 |
- |
2 |
(50%) |
NM |
(50%) |
|||||||||
|
Suburban |
- |
- |
- |
1 |
- |
1 |
(100%) |
NM |
(100%) |
|||||||||
|
Ascend Collection |
- |
1 |
1 |
- |
2 |
2 |
NM |
(50%) |
(50%) |
|||||||||
|
Cambria Suites |
1 |
- |
1 |
- |
- |
- |
NM |
NM |
NM |
|||||||||
|
Total Domestic System |
6 |
50 |
56 |
10 |
45 |
55 |
(40%) |
11% |
2% |
|||||||||
|
Exhibit 7 |
||||||||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
||||||||||||||||||||||||
|
DOMESTIC HOTEL PIPELINE OF HOTELS UNDER CONSTRUCTION, AWAITING CONVERSION OR APPROVED FOR DEVELOPMENT |
||||||||||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||||||||||
|
A hotel in the domestic pipeline does not always result in an open and operating hotel due to various factors. |
||||||||||||||||||||||||
|
Variance |
||||||||||||||||||||||||
|
March 31, 2011 |
March 31, 2010 |
|||||||||||||||||||||||
|
Units |
Units |
Conversion |
New Construction |
Total |
||||||||||||||||||||
|
Conversion |
New Construction |
Total |
Conversion |
New Construction |
Total |
Units |
% |
Units |
% |
Units |
% |
|||||||||||||
|
Comfort Inn |
31 |
58 |
89 |
43 |
81 |
124 |
(12) |
(28%) |
(23) |
(28%) |
(35) |
(28%) |
||||||||||||
|
Comfort Suites |
3 |
117 |
120 |
- |
154 |
154 |
3 |
NM |
(37) |
(24%) |
(34) |
(22%) |
||||||||||||
|
Sleep Inn |
- |
70 |
70 |
1 |
115 |
116 |
(1) |
(100%) |
(45) |
(39%) |
(46) |
(40%) |
||||||||||||
|
Quality |
47 |
6 |
53 |
39 |
13 |
52 |
8 |
21% |
(7) |
(54%) |
1 |
2% |
||||||||||||
|
Clarion |
20 |
2 |
22 |
16 |
6 |
22 |
4 |
25% |
(4) |
(67%) |
- |
0% |
||||||||||||
|
Econo Lodge |
35 |
2 |
37 |
39 |
4 |
43 |
(4) |
(10%) |
(2) |
(50%) |
(6) |
(14%) |
||||||||||||
|
Rodeway |
14 |
2 |
16 |
33 |
3 |
36 |
(19) |
(58%) |
(1) |
(33%) |
(20) |
(56%) |
||||||||||||
|
MainStay |
2 |
39 |
41 |
- |
39 |
39 |
2 |
NM |
- |
0% |
2 |
5% |
||||||||||||
|
Suburban |
- |
20 |
20 |
- |
26 |
26 |
- |
NM |
(6) |
(23%) |
(6) |
(23%) |
||||||||||||
|
Ascend Collection |
4 |
4 |
8 |
4 |
4 |
8 |
- |
0% |
- |
0% |
- |
0% |
||||||||||||
|
Cambria Suites |
- |
32 |
32 |
- |
37 |
37 |
- |
NM |
(5) |
(14%) |
(5) |
(14%) |
||||||||||||
|
156 |
352 |
508 |
175 |
482 |
657 |
(19) |
(11%) |
(130) |
(27%) |
(149) |
(23%) |
|||||||||||||
|
Exhibit 8 |
|||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
|||||
|
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION |
|||||
|
(UNAUDITED) |
|||||
|
CALCULATION OF FRANCHISING REVENUES AND ADJUSTED FRANCHISING MARGINS |
|||||
|
(dollar amounts in thousands) |
Three Months Ended March 31, |
||||
|
2011 |
2010 |
||||
|
Franchising Revenues: |
|||||
|
Total Revenues |
$ 115,281 |
$ 107,421 |
|||
|
Adjustments: |
|||||
|
Marketing and reservation revenues |
(62,967) |
(58,840) |
|||
|
Hotel operations |
(864) |
(867) |
|||
|
Franchising Revenues |
$ 51,450 |
$ 47,714 |
|||
|
Franchising Margins: |
|||||
|
Operating Margin: |
|||||
|
Total Revenues |
$ 115,281 |
$ 107,421 |
|||
|
Operating Income |
$ 25,679 |
$ 23,837 |
|||
|
Operating Margin |
22.3% |
22.2% |
|||
|
Adjusted Franchising Margin: |
|||||
|
Franchising Revenues |
$ 51,450 |
$ 47,714 |
|||
|
Operating Income |
$ 25,679 |
$ 23,837 |
|||
|
Employee termination benefits |
70 |
352 |
|||
|
Hotel operations |
(31) |
(111) |
|||
|
$ 25,718 |
$ 24,078 |
||||
|
Adjusted Franchising Margins |
50.0% |
50.5% |
|||
|
CALCULATION OF ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE COSTS |
|||||
|
(dollar amounts in thousands) |
Three Months Ended March 31, |
||||
|
2011 |
2010 |
||||
|
Selling, general and administrative costs |
$ 23,847 |
$ 21,816 |
|||
|
Employee termination benefits |
(70) |
(352) |
|||
|
Adjusted Selling, General and Administrative Costs |
$ 23,777 |
$ 21,464 |
|||
|
CALCULATION OF ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE (EPS) |
|||||
|
(In thousands, except per share amounts) |
Three Months Ended March 31, |
||||
|
2011 |
2010 |
||||
|
Net Income |
$ 15,730 |
$ 15,793 |
|||
|
Adjustments: |
|||||
|
Loss on land held for sale |
1,111 |
- |
|||
|
Employee termination benefits |
44 |
220 |
|||
|
Adjusted Net Income |
$ 16,885 |
$ 16,013 |
|||
|
Weighted average shares outstanding-diluted |
59,825 |
59,600 |
|||
|
Diluted Earnings Per Share |
$ 0.26 |
$ 0.26 |
|||
|
Adjustments: |
|||||
|
Loss on land held for sale |
0.02 |
- |
|||
|
Employee termination benefits |
- |
0.01 |
|||
|
Adjusted Diluted Earnings Per Share (EPS) |
$ 0.28 |
$ 0.27 |
|||
|
Adjusted EBITDA Reconciliation |
|||||||
|
(in millions) |
|||||||
|
Q1 2011 Actuals |
Q1 2010 Actuals |
Full-Year 2011 Outlook |
|||||
|
Operating Income (per GAAP) |
$ 25.7 |
$ 23.8 |
$168.1-$170.1 |
||||
|
Employee termination benefits |
0.1 |
0.4 |
0.1 |
||||
|
Depreciation and amortization |
2.0 |
2.2 |
8.8 |
||||
|
Adjusted Earnings before interest, taxes, depreciation & amortization (non-GAAP) |
$ 27.8 |
$ 26.4 |
$177-$179 |
||||
SOURCE Choice Hotels International, Inc.
CONTACT: David White, Senior Vice President, Chief Financial Officer & Treasurer, +1-301-592-5117; or David Peikin, Senior Director, Corporate Communications, +1-301-592-6361
Web Site: http://www.choicehotels.com
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