ROCKVILLE, Md., April 28, 2014 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE: CHH) today reported the following highlights for the first quarter of 2014:
-- Diluted earnings per share ("EPS") for the three months ended March 31,
2014 totaled $0.32, an increase of 23 percent from the same period of
2013.
-- Diluted EPS from continuing operations for the three months ended March
31, 2014 totaled $0.29, an increase of 12 percent from the same period
of 2013.
-- Earnings before interest, taxes, depreciation and amortization
("EBITDA") from franchising activities for the three months ended March
31, 2014 totaled $40.1 million, an increase of 15 percent from the same
period of 2013.
-- Franchising revenues for the three months ended March 31, 2014 totaled
$63.2 million, an increase of 6 percent from the same period of 2013.
-- Franchising margins for the three months ended March 31, 2014 were 60.2
percent, an increase of 510 basis points from the same period of 2013.
-- Domestic royalty fees for the three months ended March 31, 2014 totaled
$46.5 million, an increase of 5 percent from the same period of 2013.
-- Domestic unit and room growth increased 2.4 percent and 1.6 percent from
March 31, 2013, respectively.
-- Domestic system-wide revenue per available room ("RevPAR") increased 5.6
percent in the first quarter of 2014 as occupancy and average daily
rates increased 200 basis points and 1.1 percent, respectively from the
same period of 2013.
-- The company executed 59 new domestic hotel franchise contracts for the
three months ended March 31, 2014 compared to 83 new domestic hotel
franchise contracts for the same period of 2013. Domestic hotel
contracts executed during the three months ended March 31, 2013 reflect
a multi-faceted strategic marketing alliance with Bluegreen Corporation
which resulted in the addition of 21 Bluegreen Vacation Club® Resorts
to the company's Ascend Hotel Collection. Excluding this transaction,
domestic franchise agreements executed during the first quarter of 2014
totaled 59 compared to 62 new domestic hotel franchise contracts in the
same period of 2013.
-- Domestic relicensing and contract renewal transactions for the three
months ended March 31, 2014 totaled 83 contracts, an increase of 20
percent from the same period of 2013.
-- The company sold two of its three company-owned Mainstay Suites hotels
during the three months ended March 31, 2014 resulting in a $2.6 million
gain.
"We are very pleased with the first quarter performance of our franchising business which exceeded our expectations and resulted in a 15 percent increase in franchising EBITDA and an expansion of our franchising margins due to our strong RevPAR growth and disciplined cost management," said Stephen P. Joyce, president and chief executive officer. "We are optimistic that we are well positioned to benefit from strong consumer and developer demand for our brands."
Discontinued Operations
In the first quarter of 2014, the company entered into a plan to sell its three owned hotels operated under the MainStay Suites brand. The company determined that the disposal of these hotels met the definition of a discontinued operation since the operations and cash flows of these components will be eliminated from the on-going operations of the company and the company will not have significant continuing involvement in the operations of the hotels after the disposal transaction.
At March 31, 2014, the company had disposed of two of the three owned hotels and expects the third hotel to be sold during the year ended December 31, 2014. The new owners of the two MainStay Suites hotels have executed new franchise agreements with the company and we expect that following the sale of the third hotel the new owner will also execute a new franchise agreement.
The company's consolidated statement of income for the three months ended March 31, 2014 and the company's consolidated balance sheet as of March 31, 2014 reflect these three company-owned hotels as discontinued operations. In addition, the company's statement of income for the three months ended March 31, 2013 has been reclassified to account for these operations as discontinued. Summarized financial information related to these discontinued operations is presented in Exhibit 9 of this press release.
Outlook
The company's consolidated 2014 outlook reflects continued growth of the company's core hotel franchising business, continued investment in and expanded revenue contribution from the SkyTouch division and the sale of the three company-owned Mainstay Suites hotels described below as well as the following assumptions:
-- All figures assume no repurchases of common stock under the company's
share repurchase program; and
-- The effective tax rate for continuing operations is expected to be 30.8%
for the second quarter and full-year 2014.
Franchising
-- EBITDA from franchising activities for full-year 2014 are expected to
range between $227 million and $232 million;
-- Net domestic unit growth for 2014 is expected to increase between 1% and
2%;
-- RevPAR is expected to increase approximately 5% for the second quarter
and 4.5% to 5.5% for full-year 2014; and
-- The effective royalty rate is expected to decline 3 basis points for
full-year 2014.
SkyTouch
-- Reductions in EBITDA from our investment in the SkyTouch division for
full-year 2014 are expected to be approximately $20 million;
-- Execution of third-party contracts results in annualized revenue ranging
between $4 million and $6 million with realized revenues for the year
ended December 31, 2014 totaling approximately $2 million; and
-- SG&A expenses are forecasted to be approximately $22 million related to
investment in business development, sales and marketing and continued
software development expenditures related to the division's cloud-based
hotel operating system technology related products and services.
Discontinued Operations
-- Company EBITDA projections exclude the three company-owned Mainstay
Suites hotels which generated EBITDA of approximately $1.1 million in
2013; and
-- Diluted EPS projections for the full-year 2014 include a gain on sale of
the three company-owned Mainstay Suites hotels totaling $0.03 per share.
Consolidated Outlook
The company's second quarter 2014 diluted EPS is expected to be $0.48. The company expects full-year 2014 diluted EPS to range between $1.87 and $1.93. EBITDA for full-year 2014 are expected to range between $207 million and $212 million.
Conference Call
Choice will conduct a conference call on Monday, April 28, 2014 at 10:00 a.m. EDT to discuss the company's first quarter 2014 results. The dial-in number to listen to the call is 1-800-591-6942, and the access code is 70683172. International callers should dial 1-617-614-4909 and enter the access code 70683172. 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 page will feature a conference call microphone icon to access the call.
The call will be recorded and available for replay beginning at 2:00 p.m. EDT on Monday, April 28, 2014 through Monday, May 5, 2014 by calling 1-888-286-8010 and entering access code 19637446. The international dial-in number for the replay is 1-617-801-6888, access code 1963746. In addition, the call will be archived for approximately one-year and available on www.choicehotels.com via the Investor Info link.
About Choice Hotels
Choice Hotels International, Inc. franchises more than 6,300 hotels, representing more than 500,000 rooms, in the United States and more than 35 other countries and territories. As of March 31, 2014, 398 hotels, representing more than 30,000 rooms, were under construction, awaiting conversion or approved for development in the United States. Additionally, 95 hotels, representing approximately 8,900 rooms, were under construction, awaiting conversion or approved for development in more than 15 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, as well as its Ascend Hotel Collection membership program, serve guests worldwide.
SkyTouch Technology is a division of Choice Hotels International, Inc. that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company.
Additional corporate information can 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 Private Securities Litigation Reform Act of 1995. Generally, our use of words such as "expect," "estimate," "believe," "anticipate," "will," "forecast," "plan," "project," "assume" or similar words of futurity identify such forward-looking statements. These 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, ability to repay outstanding indebtedness, payment of 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 company's filings with the Securities and Exchange Commission including our annual reports on Form 10-K and our quarterly reports filed on Form 10-Q. 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 Presented in this Press Release
EBITDA, franchising revenues, franchising SG&A, franchising EBITDA and franchising margins are non-GAAP financial measurements. These measures should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by generally accepted accounting principles in the United States ("GAAP"), such as 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 EBITDA, franchising revenues, franchising SG&A and franchising margins to the most comparable GAAP financial measures. We discuss management's reasons for reporting these non-GAAP measures below.
Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA reflects income from continuing operations excluding the impact of interest expense, interest income, provision for income taxes, depreciation and amortization, other (gains) and losses and equity in net income of unconsolidated affiliates. We consider EBITDA to be an indicator of operating performance because we use it to measure our ability to service debt, fund capital expenditures, and expand our business. We also use EBITDA, as do analysts, lenders, investors and others, to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA also excludes depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.
Franchising Revenues, Operating Income, EBITDA, SG&A and Margins: The company reports franchising revenues, operating income, EBITDA, SG&A and margins which exclude marketing and reservation revenues and SkyTouch Technology operations. Marketing and reservation activities are excluded since the company is required by its franchise agreements to use the fees collected for marketing and reservation activities; as such, no income or loss to the company is generated. Cumulative marketing and reservation system fees not expended are recorded as a liability in the company's financial statements and are carried over to the next 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 deferred and recorded as an asset in the company's financial statements and recovered in future periods. SkyTouch Technology is a division of the company that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company. The operations for SkyTouch Technology are excluded since they do not reflect the company's core franchising business but are an adjacent, complimentary line of business. These non-GAAP measures are a commonly used measure of performance in our industry and facilitate comparisons between the company and its competitors.
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, Ascend Hotel Collection and SkyTouch Technology are proprietary trademarks and service marks of Choice Hotels International.
© 2014 Choice Hotels International, Inc. All rights reserved.
Choice Hotels International, Inc. Exhibit 1
Consolidated Statements of Income
(Unaudited)
Three Months Ended March 31,
----------------------------
Variance
2014 2013 $ %
---- ---- --- ---
(In thousands, except per share amounts)
REVENUES:
Royalty fees $51,681 $49,736 $1,945 4%
Initial franchise and
relicensing fees 3,740 3,777 (37) (1%)
Procurement services 4,778 3,950 828 21%
Marketing and
reservation 84,012 76,440 7,572 10%
Other 3,072 2,013 1,059 53%
----- ----- ----- ---
Total revenues 147,283 135,916 11,367 8%
OPERATING EXPENSES:
Selling, general and
administrative 26,463 26,916 (453) (2%)
Depreciation and
amortization 2,122 2,041 81 4%
Marketing and
reservation 84,012 76,440 7,572 10%
------ ------ ----- ---
Total operating
expenses 112,597 105,397 7,200 7%
Operating income 34,686 30,519 4,167 14%
OTHER INCOME AND EXPENSES, NET:
Interest expense 10,171 10,770 (599) (6%)
Interest income (503) (644) 141 (22%)
Other (gains) and
losses (59) (710) 651 (92%)
Equity in net loss of
affiliates 35 141 (106) (75%)
Total other income and
expenses, net 9,644 9,557 87 1%
----- ----- --- ---
Income from continuing
operations before
income taxes 25,042 20,962 4,080 19%
Income taxes 7,711 5,406 2,305 43%
----- ----- ----- ---
Income from continuing
operations 17,331 15,556 1,775 11%
Income (loss) from
discontinued
operations, net of
income taxes 1,641 (33) 1,674 (5073%)
Net income $18,972 $15,523 $3,449 22%
======= ======= ====== ===
Basic earnings per share
Continuing operations $0.30 $0.27 $0.03 11%
Discontinued
operations 0.03 - 0.03 NM
$0.33 $0.27 $0.06 22%
===== ===== ===== ===
Diluted earnings per share
Continuing operations $0.29 $0.26 $0.03 12%
Discontinued
operations 0.03 - 0.03 NM
$0.32 $0.26 $0.06 23%
===== ===== ===== ===
Choice Hotels International, Inc. Exhibit 2
Consolidated Balance Sheets
(In thousands, except per share amounts) March 31, December 31,
2014 2013
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $174,878 $167,795
Accounts receivable, net 59,241 53,521
Other current assets 43,595 37,330
------ ------
Total current
assets 277,714 258,646
Fixed assets and intangibles, net 131,681 141,858
Notes receivable, net of allowances 34,223 31,872
Advances, marketing and reservations activities 18,856 19,127
Investments, employee benefit plans, at fair
value 16,852 15,950
Other assets 75,574 72,446
------ ------
Total assets $554,900 $539,899
-------- --------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable and accrued expenses $82,037 $98,288
Deferred revenue 69,155 61,188
Current portion of long-term debt 11,026 10,088
Other current liabilities 6,039 4,774
----- -----
Total current
liabilities 168,257 174,338
Long-term debt 795,497 783,471
Deferred compensation & retirement plan
obligations 22,387 22,527
Other liabilities 23,392 23,808
------ ------
Total liabilities 1,009,533 1,004,144
------------
Common stock, $0.01 par value 584 586
Additional paid-in-capital 118,020 117,768
Accumulated other comprehensive loss (5,469) (6,217)
Treasury stock, at cost (917,226) (918,031)
Retained earnings 349,458 341,649
------- -------
Total shareholders'
deficit (454,633) (464,245)
------------
Total liabilities and shareholders'
deficit $554,900 $539,899
-------- --------
Choice Hotels
International, Inc. Exhibit 3
Consolidated Statements
of Cash Flows
(Unaudited)
(In thousands) Three Months Ended
March 31,
-------------------
2014 2013
---- ----
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income $18,972 $15,523
Adjustments to reconcile
net income to net cash
provided
by operating activities:
Depreciation and
amortization 2,122 2,175
Gain on sale of assets (2,572) -
Provision for bad debts,
net 1,182 844
Non-cash stock
compensation and other
charges 2,887 2,549
Non-cash interest and
other (income) loss 416 76
Deferred income taxes (3) 446
Dividends received from
equity method
investments 181 146
Equity in net loss of
affiliates 35 141
Changes in assets and
liabilities:
Receivables (7,491) (3,531)
Advances to/from
marketing and
reservation activities,
net 5,309 (4,101)
Forgivable notes
receivable, net (3,623) (1,729)
Accounts payable 2,080 10,471
Accrued expenses (19,861) (31,145)
Income taxes payable/
receivable 3,160 4,367
Deferred revenue 7,932 5,160
Other assets (3,103) (3,869)
Other liabilities (2,359) 2,622
------ -----
NET CASH PROVIDED BY
OPERATING ACTIVITIES 5,264 145
----- ---
CASH FLOWS FROM
INVESTING ACTIVITIES:
Investment in property
and equipment (3,015) (13,645)
Proceeds from sales of
assets 8,703 -
Equity method
investments (3,379) (1,000)
Issuance of mezzanine
and other notes
receivable (587) -
Collections of mezzanine
and other notes
receivable 68 19
Purchases of
investments, employee
benefit plans (890) (1,242)
Proceeds from sales of
investments, employee
benefit plans 281 3,882
Other items, net (154) (101)
---- ----
NET CASH PROVIDED (USED)
IN INVESTING ACTIVITIES 1,027 (12,087)
----- -------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Net borrowings pursuant
to revolving credit
facility 15,000 18,000
Principal payments on
long-term debt (2,052) (2,046)
Dividends paid (10,784) (503)
Purchase of treasury
stock (4,530) (3,634)
Excess tax benefits from
stock-based
compensation 1,024 952
Proceeds from exercise
of stock options 1,547 5,367
----- -----
NET CASH PROVIDED BY
FINANCING ACTIVITIES 205 18,136
--- ------
Net change in cash and
cash equivalents 6,496 6,194
Effect of foreign
exchange rate changes
on cash and cash
equivalents 587 (146)
Cash and cash
equivalents at
beginning of period 167,795 134,177
------- -------
CASH AND CASH
EQUIVALENTS AT END OF
PERIOD $174,878 $140,225
======== ========
Exhibit 4
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL OPERATING INFORMATION
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
For the Three Months Ended March 31, 2014* For the Three Months Ended March 31, 2013* Change
----------------------------------------- ----------------------------------------- ------
Average Daily Average Daily Average Daily
Rate Occupancy RevPAR Rate Occupancy RevPAR Rate Occupancy RevPAR
---- --------- ------ ---- --------- ------ ---- --------- ------
Comfort Inn $77.34 49.5% $38.25 $76.30 47.5% $36.24 1.4% 200 bps 5.5%
Comfort Suites 83.59 54.5% 45.52 81.82 52.6% 43.04 2.2% 190 bps 5.8%
Sleep 70.05 49.8% 34.90 69.07 47.6% 32.85 1.4% 220 bps 6.2%
Quality 65.33 44.2% 28.90 64.20 42.2% 27.08 1.8% 200 bps 6.7%
Clarion 68.61 43.9% 30.14 68.84 41.1% 28.32 (0.3%) 280 bps 6.4%
Econo Lodge 51.49 40.2% 20.70 51.67 38.6% 19.95 (0.3%) 160 bps 3.8%
Rodeway 49.67 45.5% 22.58 47.96 42.2% 20.25 3.6% 330 bps 11.5%
MainStay 69.31 59.7% 41.35 68.55 57.0% 39.05 1.1% 270 bps 5.9%
Suburban 41.56 64.6% 26.85 40.90 63.4% 25.94 1.6% 120 bps 3.5%
Ascend Hotel Collection 104.61 56.3% 58.88 113.87 56.1% 63.84 (8.1%) 20 bps (7.8%)
------ ---- ----- ------ ---- ----- ----- --- --- -----
Total $69.63 47.5% $33.09 $68.87 45.5% $31.34 1.1% 200 bps 5.6%
====== ==== ====== ====== ==== ====== === === === ===
For the Quarter Ended
---------------------
3/31/2014 3/31/2013
System-wide effective
royalty rate 4.35% 4.39%
* Operating statistics represent hotel operations from December through February
Exhibit 5
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA
(UNAUDITED)
March 31, 2014 March 31, 2013 Variance
-------------- -------------- --------
Hotels Rooms Hotels Rooms Hotels Rooms % %
------ ----- ------ ----- ------ ----- --- ---
Comfort Inn 1,297 101,099 1,332 104,159 (35) (3,060) (2.6%) (2.9%)
Comfort Suites 590 45,609 597 46,079 (7) (470) (1.2%) (1.0%)
Sleep 381 27,517 382 27,685 (1) (168) (0.3%) (0.6%)
Quality 1,236 102,327 1,172 99,090 64 3,237 5.5% 3.3%
Clarion 191 27,393 190 27,268 1 125 0.5% 0.5%
Econo Lodge 840 51,544 811 49,244 29 2,300 3.6% 4.7%
Rodeway 449 25,077 421 24,269 28 808 6.7% 3.3%
MainStay 43 3,329 41 3,165 2 164 4.9% 5.2%
Suburban 63 7,152 63 7,241 - (89) 0.0% (1.2%)
Ascend Hotel Collection 103 9,251 63 5,481 40 3,770 63.5% 68.8%
Cambria Suites 18 2,119 19 2,221 (1) (102) (5.3%) (4.6%)
--- ----- --- ----- --- ---- ----- -----
Domestic Franchises 5,211 402,417 5,091 395,902 120 6,515 2.4% 1.6%
International Franchises 1,153 104,735 1,173 104,474 (20) 261 (1.7%) 0.2%
----- ------- ----- ------- --- --- ----- ---
Total Franchises 6,364 507,152 6,264 500,376 100 6,776 1.6% 1.4%
===== ======= ===== ======= === ===== === ===
Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL INFORMATION BY BRAND
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS
(UNAUDITED)
For the Three Months Ended March 31, 2014 For the Three Months Ended March 31,
2013 % Change
----------------------------------------- ------------------------------------- --------
New New New
Construction Conversion Total Construction Conversion Total Construction Conversion Total
------------ ---------- ----- ------------ ---------- ----- ------------ ---------- -----
Comfort Inn 3 3 6 3 5 8 0% (40%) (25%)
Comfort Suites 1 - 1 2 2 4 (50%) (100%) (75%)
Sleep 4 - 4 1 - 1 300% NM 300%
Quality 1 10 11 - 19 19 NM (47%) (42%)
Clarion - 2 2 - 3 3 NM (33%) (33%)
Econo Lodge - 6 6 - 8 8 NM (25%) (25%)
Rodeway 1 15 16 - 9 9 NM 67% 78%
MainStay 4 - 4 1 - 1 300% NM 300%
Suburban 1 1 2 - 1 1 NM 0% 100%
Ascend Hotel Collection 3 3 6 2 26 28 50% (88%) (79%)
Cambria Suites 1 - 1 1 - 1 0% NM 0%
--- --- --- --- --- --- --- --- ---
Total Domestic System 19 40 59 10 73 83 90% (45%) (29%)
=== === === === === === === ==== ====
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, 2014 March 31, 2013
Units Units Conversion New Construction Total
----- ----- ---------- ---------------- -----
Conversion New Construction Total Conversion New Construction Total Units % Units % Units %
---------- ---------------- ----- ---------- ---------------- ----- ----- --- ----- --- ----- ---
Comfort Inn 39 51 90 30 49 79 9 30% 2 4% 11 14%
Comfort Suites 2 46 48 2 67 69 - 0% (21) (31%) (21) (30%)
Sleep Inn 1 48 49 1 44 45 - 0% 4 9% 4 9%
Quality 38 4 42 35 2 37 3 9% 2 100% 5 14%
Clarion 6 2 8 9 - 9 (3) (33%) 2 NM (1) (11%)
Econo Lodge 20 2 22 23 - 23 (3) (13%) 2 NM (1) (4%)
Rodeway 33 2 35 30 - 30 3 10% 2 NM 5 17%
MainStay 2 35 37 - 25 25 2 NM 10 40% 12 48%
Suburban 6 17 23 3 12 15 3 100% 5 42% 8 53%
Ascend Hotel Collection 11 12 23 30 9 39 (19) (63%) 3 33% (16) (41%)
Cambria Suites - 21 21 - 24 24 - NM (3) (13%) (3) (13%)
--- --- --- --- --- --- --- --- --- ---- --- ----
Total Domestic Pipeline 158 240 398 163 232 395 (5) (3%) 8 3% 3 1%
=== === === === === === === === === === === ===
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 8
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION
(UNAUDITED)
CALCULATION OF FRANCHISING REVENUES AND FRANCHISING MARGINS
(dollar amounts in thousands) Three Months Ended March 31,
----------------------------
2014 2013
---- ----
Franchising Revenues:
Total Revenues $147,283 $135,916
Adjustments:
Marketing and reservation revenues (84,012) (76,440)
Other (53) -
Franchising Revenues $63,218 $59,476
-------
Franchising Margins:
Operating Margin:
Total Revenues $147,283 $135,916
Operating Income $34,686 $30,519
Operating Margin 23.6% 22.5%
-----
Franchising Margin:
Franchising Revenues $63,218 $59,476
Operating Income $34,686 $30,519
SkyTouch Division operating loss 3,350 2,255
$38,036 $32,774
------- -------
Franchising Margins 60.2% 55.1%
-----
CALCULATION OF FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES
(dollar amounts in thousands) Three Months Ended March 31,
----------------------------
2014 2013
---- ----
Total Selling, General and
Administrative Expenses $26,463 $26,916
SkyTouch Division (3,336) (2,241)
Franchising Selling, General and
Administration Expenses $23,127 $24,675
=======
CALCULATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA")
(dollar amounts in thousands)
Q1 2014 Actuals Q1 2013 Actuals
--------------- ---------------
Income from continuing
operations $17,331 $15,556
Income taxes 7,711 5,406
Interest expense 10,171 10,770
Interest income (503) (644)
Other (gains) and losses (59) (710)
Equity in net loss of affiliates 35 141
Depreciation and amortization 2,122 2,041
EBITDA $36,808 $32,560
======= =======
Franchising $40,091 $34,801
SkyTouch (3,283) (2,241)
$36,808 $32,560
======= =======
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 9
DISCONTINUED OPERATIONS
(UNAUDITED)
Three Months Ended March 31,
----------------------------
(In thousands) 2014 2013
---- ----
REVENUES:
Hotel operations $690 $956
---- ----
Total revenues 690 956
OPERATING EXPENSES:
Hotel operations 662 875
Depreciation and
amortization - 134
--- ---
Total operating
expenses 662 1,009
Operating income (loss) 28 (53)
Gain on disposal of
discontinued
operations 2,581 -
----- ---
Income (loss) from
discontinued
operations before
income taxes 2,609 (53)
Income tax (benefit) 968 (20)
Income (loss) from
discontinued
operations $1,641 $(33)
====== ====
SOURCE Choice Hotels International, Inc.
SOURCE: Choice Hotels International, Inc.
PR Newswire
ROCKVILLE, Md., April 28, 2014
ROCKVILLE, Md., April 28, 2014 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE: CHH) today reported the following highlights for the first quarter of 2014:
"We are very pleased with the first quarter performance of our franchising business which exceeded our expectations and resulted in a 15 percent increase in franchising EBITDA and an expansion of our franchising margins due to our strong RevPAR growth and disciplined cost management," said Stephen P. Joyce, president and chief executive officer. "We are optimistic that we are well positioned to benefit from strong consumer and developer demand for our brands."
Discontinued Operations
In the first quarter of 2014, the company entered into a plan to sell its three owned hotels operated under the MainStay Suites brand. The company determined that the disposal of these hotels met the definition of a discontinued operation since the operations and cash flows of these components will be eliminated from the on-going operations of the company and the company will not have significant continuing involvement in the operations of the hotels after the disposal transaction.
At March 31, 2014, the company had disposed of two of the three owned hotels and expects the third hotel to be sold during the year ended December 31, 2014. The new owners of the two MainStay Suites hotels have executed new franchise agreements with the company and we expect that following the sale of the third hotel the new owner will also execute a new franchise agreement.
The company's consolidated statement of income for the three months ended March 31, 2014 and the company's consolidated balance sheet as of March 31, 2014 reflect these three company-owned hotels as discontinued operations. In addition, the company's statement of income for the three months ended March 31, 2013 has been reclassified to account for these operations as discontinued. Summarized financial information related to these discontinued operations is presented in Exhibit 9 of this press release.
Outlook
The company's consolidated 2014 outlook reflects continued growth of the company's core hotel franchising business, continued investment in and expanded revenue contribution from the SkyTouch division and the sale of the three company-owned Mainstay Suites hotels described below as well as the following assumptions:
Franchising
SkyTouch
Discontinued Operations
Consolidated Outlook
The company's second quarter 2014 diluted EPS is expected to be $0.48. The company expects full-year 2014 diluted EPS to range between $1.87 and $1.93. EBITDA for full-year 2014 are expected to range between $207 million and $212 million.
Conference Call
Choice will conduct a conference call on Monday, April 28, 2014 at 10:00 a.m. EDT to discuss the company's first quarter 2014 results. The dial-in number to listen to the call is 1-800-591-6942, and the access code is 70683172. International callers should dial 1-617-614-4909 and enter the access code 70683172. 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 page will feature a conference call microphone icon to access the call.
The call will be recorded and available for replay beginning at 2:00 p.m. EDT on Monday, April 28, 2014 through Monday, May 5, 2014 by calling 1-888-286-8010 and entering access code 19637446. The international dial-in number for the replay is 1-617-801-6888, access code 1963746. In addition, the call will be archived for approximately one-year and available on www.choicehotels.com via the Investor Info link.
About Choice Hotels
Choice Hotels International, Inc. franchises more than 6,300 hotels, representing more than 500,000 rooms, in the United States and more than 35 other countries and territories. As of March 31, 2014, 398 hotels, representing more than 30,000 rooms, were under construction, awaiting conversion or approved for development in the United States. Additionally, 95 hotels, representing approximately 8,900 rooms, were under construction, awaiting conversion or approved for development in more than 15 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, as well as its Ascend Hotel Collection membership program, serve guests worldwide.
SkyTouch Technology is a division of Choice Hotels International, Inc. that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company.
Additional corporate information can 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 Private Securities Litigation Reform Act of 1995. Generally, our use of words such as "expect," "estimate," "believe," "anticipate," "will," "forecast," "plan," "project," "assume" or similar words of futurity identify such forward-looking statements. These 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, ability to repay outstanding indebtedness, payment of 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 company's filings with the Securities and Exchange Commission including our annual reports on Form 10-K and our quarterly reports filed on Form 10-Q. 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 Presented in this Press Release
EBITDA, franchising revenues, franchising SG&A, franchising EBITDA and franchising margins are non-GAAP financial measurements. These measures should not be considered as an alternative to any measure of performance or liquidity as promulgated under or authorized by generally accepted accounting principles in the United States ("GAAP"), such as 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 EBITDA, franchising revenues, franchising SG&A and franchising margins to the most comparable GAAP financial measures. We discuss management's reasons for reporting these non-GAAP measures below.
Earnings Before Interest, Taxes, Depreciation and Amortization: EBITDA reflects income from continuing operations excluding the impact of interest expense, interest income, provision for income taxes, depreciation and amortization, other (gains) and losses and equity in net income of unconsolidated affiliates. We consider EBITDA to be an indicator of operating performance because we use it to measure our ability to service debt, fund capital expenditures, and expand our business. We also use EBITDA, as do analysts, lenders, investors and others, to evaluate companies because it excludes certain items that can vary widely across different industries or among companies within the same industry. For example, interest expense can be dependent on a company's capital structure, debt levels and credit ratings. Accordingly, the impact of interest expense on earnings can vary significantly among companies. The tax positions of companies can also vary because of their differing abilities to take advantage of tax benefits and because of the tax policies of the jurisdictions in which they operate. As a result, effective tax rates and provision for income taxes can vary considerably among companies. EBITDA also excludes depreciation and amortization because companies utilize productive assets of different ages and use different methods of both acquiring and depreciating productive assets. These differences can result in considerable variability in the relative costs of productive assets and the depreciation and amortization expense among companies.
Franchising Revenues, Operating Income, EBITDA, SG&A and Margins: The company reports franchising revenues, operating income, EBITDA, SG&A and margins which exclude marketing and reservation revenues and SkyTouch Technology operations. Marketing and reservation activities are excluded since the company is required by its franchise agreements to use the fees collected for marketing and reservation activities; as such, no income or loss to the company is generated. Cumulative marketing and reservation system fees not expended are recorded as a liability in the company's financial statements and are carried over to the next 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 deferred and recorded as an asset in the company's financial statements and recovered in future periods. SkyTouch Technology is a division of the company that develops and markets cloud-based technology products, including inventory management, pricing and connectivity to third party channels, to hoteliers not under franchise agreements with the company. The operations for SkyTouch Technology are excluded since they do not reflect the company's core franchising business but are an adjacent, complimentary line of business. These non-GAAP measures are a commonly used measure of performance in our industry and facilitate comparisons between the company and its competitors.
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, Ascend Hotel Collection and SkyTouch Technology are proprietary trademarks and service marks of Choice Hotels International.
© 2014 Choice Hotels International, Inc. All rights reserved.
|
Choice Hotels International, Inc. |
Exhibit 1 |
||||||
|
Consolidated Statements of Income |
|||||||
|
(Unaudited) |
|||||||
|
Three Months Ended March 31, |
|||||||
|
Variance |
|||||||
|
2014 |
2013 |
$ |
% |
||||
|
(In thousands, except per share amounts) |
|||||||
|
REVENUES: |
|||||||
|
Royalty fees |
$ 51,681 |
$ 49,736 |
$ 1,945 |
4% |
|||
|
Initial franchise and relicensing fees |
3,740 |
3,777 |
(37) |
(1%) |
|||
|
Procurement services |
4,778 |
3,950 |
828 |
21% |
|||
|
Marketing and reservation |
84,012 |
76,440 |
7,572 |
10% |
|||
|
Other |
3,072 |
2,013 |
1,059 |
53% |
|||
|
Total revenues |
147,283 |
135,916 |
11,367 |
8% |
|||
|
OPERATING EXPENSES: |
|||||||
|
Selling, general and administrative |
26,463 |
26,916 |
(453) |
(2%) |
|||
|
Depreciation and amortization |
2,122 |
2,041 |
81 |
4% |
|||
|
Marketing and reservation |
84,012 |
76,440 |
7,572 |
10% |
|||
|
Total operating expenses |
112,597 |
105,397 |
7,200 |
7% |
|||
|
Operating income |
34,686 |
30,519 |
4,167 |
14% |
|||
|
OTHER INCOME AND EXPENSES, NET: |
|||||||
|
Interest expense |
10,171 |
10,770 |
(599) |
(6%) |
|||
|
Interest income |
(503) |
(644) |
141 |
(22%) |
|||
|
Other (gains) and losses |
(59) |
(710) |
651 |
(92%) |
|||
|
Equity in net loss of affiliates |
35 |
141 |
(106) |
(75%) |
|||
|
Total other income and expenses, net |
9,644 |
9,557 |
87 |
1% |
|||
|
Income from continuing operations before income taxes |
25,042 |
20,962 |
4,080 |
19% |
|||
|
Income taxes |
7,711 |
5,406 |
2,305 |
43% |
|||
|
Income from continuing operations |
17,331 |
15,556 |
1,775 |
11% |
|||
|
Income (loss) from discontinued operations, net of income taxes |
1,641 |
(33) |
1,674 |
(5073%) |
|||
|
Net income |
$ 18,972 |
$ 15,523 |
$ 3,449 |
22% |
|||
|
Basic earnings per share |
|||||||
|
Continuing operations |
$ 0.30 |
$ 0.27 |
$ 0.03 |
11% |
|||
|
Discontinued operations |
0.03 |
- |
0.03 |
NM |
|||
|
$ 0.33 |
$ 0.27 |
$ 0.06 |
22% |
||||
|
Diluted earnings per share |
|||||||
|
Continuing operations |
$ 0.29 |
$ 0.26 |
$ 0.03 |
12% |
|||
|
Discontinued operations |
0.03 |
- |
0.03 |
NM |
|||
|
$ 0.32 |
$ 0.26 |
$ 0.06 |
23% |
||||
|
Choice Hotels International, Inc. |
Exhibit 2 |
||||
|
Consolidated Balance Sheets |
|||||
|
(In thousands, except per share amounts) |
March 31, |
December 31, |
|||
|
2014 |
2013 |
||||
|
(Unaudited) |
|||||
|
ASSETS |
|||||
|
Cash and cash equivalents |
$ 174,878 |
$ 167,795 |
|||
|
Accounts receivable, net |
59,241 |
53,521 |
|||
|
Other current assets |
43,595 |
37,330 |
|||
|
Total current assets |
277,714 |
258,646 |
|||
|
Fixed assets and intangibles, net |
131,681 |
141,858 |
|||
|
Notes receivable, net of allowances |
34,223 |
31,872 |
|||
|
Advances, marketing and reservations activities |
18,856 |
19,127 |
|||
|
Investments, employee benefit plans, at fair value |
16,852 |
15,950 |
|||
|
Other assets |
75,574 |
72,446 |
|||
|
Total assets |
$ 554,900 |
$ 539,899 |
|||
|
LIABILITIES AND SHAREHOLDERS' DEFICIT |
|||||
|
Accounts payable and accrued expenses |
$ 82,037 |
$ 98,288 |
|||
|
Deferred revenue |
69,155 |
61,188 |
|||
|
Current portion of long-term debt |
11,026 |
10,088 |
|||
|
Other current liabilities |
6,039 |
4,774 |
|||
|
Total current liabilities |
168,257 |
174,338 |
|||
|
Long-term debt |
795,497 |
783,471 |
|||
|
Deferred compensation & retirement plan obligations |
22,387 |
22,527 |
|||
|
Other liabilities |
23,392 |
23,808 |
|||
|
Total liabilities |
1,009,533 |
1,004,144 |
|||
|
Common stock, $0.01 par value |
584 |
586 |
|||
|
Additional paid-in-capital |
118,020 |
117,768 |
|||
|
Accumulated other comprehensive loss |
(5,469) |
(6,217) |
|||
|
Treasury stock, at cost |
(917,226) |
(918,031) |
|||
|
Retained earnings |
349,458 |
341,649 |
|||
|
Total shareholders' deficit |
(454,633) |
(464,245) |
|||
|
Total liabilities and shareholders' deficit |
$ 554,900 |
$ 539,899 |
|||
|
Choice Hotels International, Inc. |
Exhibit 3 |
||
|
Consolidated Statements of Cash Flows |
|||
|
(Unaudited) |
|||
|
(In thousands) |
Three Months Ended March 31, |
||
|
2014 |
2013 |
||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||
|
Net income |
$ 18,972 |
$ 15,523 |
|
|
Adjustments to reconcile net income to net cash provided |
|||
|
by operating activities: |
|||
|
Depreciation and amortization |
2,122 |
2,175 |
|
|
Gain on sale of assets |
(2,572) |
- |
|
|
Provision for bad debts, net |
1,182 |
844 |
|
|
Non-cash stock compensation and other charges |
2,887 |
2,549 |
|
|
Non-cash interest and other (income) loss |
416 |
76 |
|
|
Deferred income taxes |
(3) |
446 |
|
|
Dividends received from equity method investments |
181 |
146 |
|
|
Equity in net loss of affiliates |
35 |
141 |
|
|
Changes in assets and liabilities: |
|||
|
Receivables |
(7,491) |
(3,531) |
|
|
Advances to/from marketing and reservation activities, net |
5,309 |
(4,101) |
|
|
Forgivable notes receivable, net |
(3,623) |
(1,729) |
|
|
Accounts payable |
2,080 |
10,471 |
|
|
Accrued expenses |
(19,861) |
(31,145) |
|
|
Income taxes payable/receivable |
3,160 |
4,367 |
|
|
Deferred revenue |
7,932 |
5,160 |
|
|
Other assets |
(3,103) |
(3,869) |
|
|
Other liabilities |
(2,359) |
2,622 |
|
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
5,264 |
145 |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||
|
Investment in property and equipment |
(3,015) |
(13,645) |
|
|
Proceeds from sales of assets |
8,703 |
- |
|
|
Equity method investments |
(3,379) |
(1,000) |
|
|
Issuance of mezzanine and other notes receivable |
(587) |
- |
|
|
Collections of mezzanine and other notes receivable |
68 |
19 |
|
|
Purchases of investments, employee benefit plans |
(890) |
(1,242) |
|
|
Proceeds from sales of investments, employee benefit plans |
281 |
3,882 |
|
|
Other items, net |
(154) |
(101) |
|
|
NET CASH PROVIDED (USED) IN INVESTING ACTIVITIES |
1,027 |
(12,087) |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||
|
Net borrowings pursuant to revolving credit facility |
15,000 |
18,000 |
|
|
Principal payments on long-term debt |
(2,052) |
(2,046) |
|
|
Dividends paid |
(10,784) |
(503) |
|
|
Purchase of treasury stock |
(4,530) |
(3,634) |
|
|
Excess tax benefits from stock-based compensation |
1,024 |
952 |
|
|
Proceeds from exercise of stock options |
1,547 |
5,367 |
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES |
205 |
18,136 |
|
|
Net change in cash and cash equivalents |
6,496 |
6,194 |
|
|
Effect of foreign exchange rate changes on cash and cash equivalents |
587 |
(146) |
|
|
Cash and cash equivalents at beginning of period |
167,795 |
134,177 |
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ 174,878 |
$ 140,225 |
|
|
Exhibit 4 |
||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. SUPPLEMENTAL OPERATING INFORMATION |
||||||||||||||||||
|
DOMESTIC HOTEL SYSTEM |
||||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||||
|
For the Three Months Ended March 31, 2014* |
For the Three Months Ended March 31, 2013* |
Change |
||||||||||||||||
|
Average Daily |
Average Daily |
Average Daily |
||||||||||||||||
|
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
||||||||||
|
Comfort Inn |
$ 77.34 |
49.5% |
$ 38.25 |
$ 76.30 |
47.5% |
$ 36.24 |
1.4% |
200 |
bps |
5.5% |
||||||||
|
Comfort Suites |
83.59 |
54.5% |
45.52 |
81.82 |
52.6% |
43.04 |
2.2% |
190 |
bps |
5.8% |
||||||||
|
Sleep |
70.05 |
49.8% |
34.90 |
69.07 |
47.6% |
32.85 |
1.4% |
220 |
bps |
6.2% |
||||||||
|
Quality |
65.33 |
44.2% |
28.90 |
64.20 |
42.2% |
27.08 |
1.8% |
200 |
bps |
6.7% |
||||||||
|
Clarion |
68.61 |
43.9% |
30.14 |
68.84 |
41.1% |
28.32 |
(0.3%) |
280 |
bps |
6.4% |
||||||||
|
Econo Lodge |
51.49 |
40.2% |
20.70 |
51.67 |
38.6% |
19.95 |
(0.3%) |
160 |
bps |
3.8% |
||||||||
|
Rodeway |
49.67 |
45.5% |
22.58 |
47.96 |
42.2% |
20.25 |
3.6% |
330 |
bps |
11.5% |
||||||||
|
MainStay |
69.31 |
59.7% |
41.35 |
68.55 |
57.0% |
39.05 |
1.1% |
270 |
bps |
5.9% |
||||||||
|
Suburban |
41.56 |
64.6% |
26.85 |
40.90 |
63.4% |
25.94 |
1.6% |
120 |
bps |
3.5% |
||||||||
|
Ascend Hotel Collection |
104.61 |
56.3% |
58.88 |
113.87 |
56.1% |
63.84 |
(8.1%) |
20 |
bps |
(7.8%) |
||||||||
|
Total |
$ 69.63 |
47.5% |
$ 33.09 |
$ 68.87 |
45.5% |
$ 31.34 |
1.1% |
200 |
bps |
5.6% |
||||||||
|
For the Quarter Ended |
||||||||||||||||||
|
3/31/2014 |
3/31/2013 |
|||||||||||||||||
|
System-wide effective royalty rate |
4.35% |
4.39% |
||||||||||||||||
|
* Operating statistics represent hotel operations from December through February |
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|
Exhibit 5 |
||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA |
||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||
|
March 31, 2014 |
March 31, 2013 |
Variance |
||||||||||||||
|
Hotels |
Rooms |
Hotels |
Rooms |
Hotels |
Rooms |
% |
% |
|||||||||
|
Comfort Inn |
1,297 |
101,099 |
1,332 |
104,159 |
(35) |
(3,060) |
(2.6%) |
(2.9%) |
||||||||
|
Comfort Suites |
590 |
45,609 |
597 |
46,079 |
(7) |
(470) |
(1.2%) |
(1.0%) |
||||||||
|
Sleep |
381 |
27,517 |
382 |
27,685 |
(1) |
(168) |
(0.3%) |
(0.6%) |
||||||||
|
Quality |
1,236 |
102,327 |
1,172 |
99,090 |
64 |
3,237 |
5.5% |
3.3% |
||||||||
|
Clarion |
191 |
27,393 |
190 |
27,268 |
1 |
125 |
0.5% |
0.5% |
||||||||
|
Econo Lodge |
840 |
51,544 |
811 |
49,244 |
29 |
2,300 |
3.6% |
4.7% |
||||||||
|
Rodeway |
449 |
25,077 |
421 |
24,269 |
28 |
808 |
6.7% |
3.3% |
||||||||
|
MainStay |
43 |
3,329 |
41 |
3,165 |
2 |
164 |
4.9% |
5.2% |
||||||||
|
Suburban |
63 |
7,152 |
63 |
7,241 |
- |
(89) |
0.0% |
(1.2%) |
||||||||
|
Ascend Hotel Collection |
103 |
9,251 |
63 |
5,481 |
40 |
3,770 |
63.5% |
68.8% |
||||||||
|
Cambria Suites |
18 |
2,119 |
19 |
2,221 |
(1) |
(102) |
(5.3%) |
(4.6%) |
||||||||
|
Domestic Franchises |
5,211 |
402,417 |
5,091 |
395,902 |
120 |
6,515 |
2.4% |
1.6% |
||||||||
|
International Franchises |
1,153 |
104,735 |
1,173 |
104,474 |
(20) |
261 |
(1.7%) |
0.2% |
||||||||
|
Total Franchises |
6,364 |
507,152 |
6,264 |
500,376 |
100 |
6,776 |
1.6% |
1.4% |
||||||||
|
Exhibit 6 |
||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
||||||||||||||||||
|
SUPPLEMENTAL INFORMATION BY BRAND |
||||||||||||||||||
|
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS |
||||||||||||||||||
|
(UNAUDITED) |
||||||||||||||||||
|
For the Three Months Ended March 31, 2014 |
For the Three Months Ended March 31, 2013 |
% Change |
||||||||||||||||
|
New |
New |
New |
||||||||||||||||
|
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
||||||||||
|
Comfort Inn |
3 |
3 |
6 |
3 |
5 |
8 |
0% |
(40%) |
(25%) |
|||||||||
|
Comfort Suites |
1 |
- |
1 |
2 |
2 |
4 |
(50%) |
(100%) |
(75%) |
|||||||||
|
Sleep |
4 |
- |
4 |
1 |
- |
1 |
300% |
NM |
300% |
|||||||||
|
Quality |
1 |
10 |
11 |
- |
19 |
19 |
NM |
(47%) |
(42%) |
|||||||||
|
Clarion |
- |
2 |
2 |
- |
3 |
3 |
NM |
(33%) |
(33%) |
|||||||||
|
Econo Lodge |
- |
6 |
6 |
- |
8 |
8 |
NM |
(25%) |
(25%) |
|||||||||
|
Rodeway |
1 |
15 |
16 |
- |
9 |
9 |
NM |
67% |
78% |
|||||||||
|
MainStay |
4 |
- |
4 |
1 |
- |
1 |
300% |
NM |
300% |
|||||||||
|
Suburban |
1 |
1 |
2 |
- |
1 |
1 |
NM |
0% |
100% |
|||||||||
|
Ascend Hotel Collection |
3 |
3 |
6 |
2 |
26 |
28 |
50% |
(88%) |
(79%) |
|||||||||
|
Cambria Suites |
1 |
- |
1 |
1 |
- |
1 |
0% |
NM |
0% |
|||||||||
|
Total Domestic System |
19 |
40 |
59 |
10 |
73 |
83 |
90% |
(45%) |
(29%) |
|||||||||
|
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, 2014 |
March 31, 2013 |
||||||||||||||||||||||
|
Units |
Units |
Conversion |
New Construction |
Total |
|||||||||||||||||||
|
Conversion |
New Construction |
Total |
Conversion |
New Construction |
Total |
Units |
% |
Units |
% |
Units |
% |
||||||||||||
|
Comfort Inn |
39 |
51 |
90 |
30 |
49 |
79 |
9 |
30% |
2 |
4% |
11 |
14% |
|||||||||||
|
Comfort Suites |
2 |
46 |
48 |
2 |
67 |
69 |
- |
0% |
(21) |
(31%) |
(21) |
(30%) |
|||||||||||
|
Sleep Inn |
1 |
48 |
49 |
1 |
44 |
45 |
- |
0% |
4 |
9% |
4 |
9% |
|||||||||||
|
Quality |
38 |
4 |
42 |
35 |
2 |
37 |
3 |
9% |
2 |
100% |
5 |
14% |
|||||||||||
|
Clarion |
6 |
2 |
8 |
9 |
- |
9 |
(3) |
(33%) |
2 |
NM |
(1) |
(11%) |
|||||||||||
|
Econo Lodge |
20 |
2 |
22 |
23 |
- |
23 |
(3) |
(13%) |
2 |
NM |
(1) |
(4%) |
|||||||||||
|
Rodeway |
33 |
2 |
35 |
30 |
- |
30 |
3 |
10% |
2 |
NM |
5 |
17% |
|||||||||||
|
MainStay |
2 |
35 |
37 |
- |
25 |
25 |
2 |
NM |
10 |
40% |
12 |
48% |
|||||||||||
|
Suburban |
6 |
17 |
23 |
3 |
12 |
15 |
3 |
100% |
5 |
42% |
8 |
53% |
|||||||||||
|
Ascend Hotel Collection |
11 |
12 |
23 |
30 |
9 |
39 |
(19) |
(63%) |
3 |
33% |
(16) |
(41%) |
|||||||||||
|
Cambria Suites |
- |
21 |
21 |
- |
24 |
24 |
- |
NM |
(3) |
(13%) |
(3) |
(13%) |
|||||||||||
|
Total Domestic Pipeline |
158 |
240 |
398 |
163 |
232 |
395 |
(5) |
(3%) |
8 |
3% |
3 |
1% |
|||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
Exhibit 8 |
||||
|
SUPPLEMENTAL NON-GAAP FINANCIAL INFORMATION |
|||||
|
(UNAUDITED) |
|||||
|
CALCULATION OF FRANCHISING REVENUES AND FRANCHISING MARGINS |
|||||
|
(dollar amounts in thousands) |
Three Months Ended March 31, |
||||
|
2014 |
2013 |
||||
|
Franchising Revenues: |
|||||
|
Total Revenues |
$ 147,283 |
$ 135,916 |
|||
|
Adjustments: |
|||||
|
Marketing and reservation revenues |
(84,012) |
(76,440) |
|||
|
Other |
(53) |
- |
|||
|
Franchising Revenues |
$ 63,218 |
$ 59,476 |
|||
|
Franchising Margins: |
|||||
|
Operating Margin: |
|||||
|
Total Revenues |
$ 147,283 |
$ 135,916 |
|||
|
Operating Income |
$ 34,686 |
$ 30,519 |
|||
|
Operating Margin |
23.6% |
22.5% |
|||
|
Franchising Margin: |
|||||
|
Franchising Revenues |
$ 63,218 |
$ 59,476 |
|||
|
Operating Income |
$ 34,686 |
$ 30,519 |
|||
|
SkyTouch Division operating loss |
3,350 |
2,255 |
|||
|
$ 38,036 |
$ 32,774 |
||||
|
Franchising Margins |
60.2% |
55.1% |
|||
|
CALCULATION OF FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES |
|||||
|
(dollar amounts in thousands) |
Three Months Ended March 31, |
||||
|
2014 |
2013 |
||||
|
Total Selling, General and Administrative Expenses |
$ 26,463 |
$ 26,916 |
|||
|
SkyTouch Division |
(3,336) |
(2,241) |
|||
|
Franchising Selling, General and Administration Expenses |
$ 23,127 |
$ 24,675 |
|||
|
CALCULATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") |
|||||
|
(dollar amounts in thousands) |
|||||
|
Q1 2014 Actuals |
Q1 2013 Actuals |
||||
|
Income from continuing operations |
$ 17,331 |
$ 15,556 |
|||
|
Income taxes |
7,711 |
5,406 |
|||
|
Interest expense |
10,171 |
10,770 |
|||
|
Interest income |
(503) |
(644) |
|||
|
Other (gains) and losses |
(59) |
(710) |
|||
|
Equity in net loss of affiliates |
35 |
141 |
|||
|
Depreciation and amortization |
2,122 |
2,041 |
|||
|
EBITDA |
$ 36,808 |
$ 32,560 |
|||
|
Franchising |
$ 40,091 |
$ 34,801 |
|||
|
SkyTouch |
(3,283) |
(2,241) |
|||
|
$ 36,808 |
$ 32,560 |
||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
Exhibit 9 |
||||
|
DISCONTINUED OPERATIONS |
|||||
|
(UNAUDITED) |
|||||
|
Three Months Ended March 31, |
|||||
|
(In thousands) |
2014 |
2013 |
|||
|
REVENUES: |
|||||
|
Hotel operations |
$ 690 |
$ 956 |
|||
|
Total revenues |
690 |
956 |
|||
|
OPERATING EXPENSES: |
|||||
|
Hotel operations |
662 |
875 |
|||
|
Depreciation and amortization |
- |
134 |
|||
|
Total operating expenses |
662 |
1,009 |
|||
|
Operating income (loss) |
28 |
(53) |
|||
|
Gain on disposal of discontinued operations |
2,581 |
- |
|||
|
Income (loss) from discontinued operations before income taxes |
2,609 |
(53) |
|||
|
Income tax (benefit) |
968 |
(20) |
|||
|
Income (loss) from discontinued operations |
$ 1,641 |
$ (33) |
|||
SOURCE Choice Hotels International, Inc.
CONTACT: David White, Senior Vice President, Chief Financial Officer & Treasurer, (301) 592-5117, or Scott Carman, Director, Public Relations, (301) 592-6361
Web Site: http://www.choicehotels.com
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