ROCKVILLE, Md., May 6, 2015 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE:CHH) today reported the following highlights for the first quarter 2015:
http://photos.prnewswire.com/prnvar/20140807/134515
-- Revenues for the three months ended March 31, 2015 totaled $175.2
million, an increase of 10 percent from the same period of 2014.
-- Domestic hotel executed franchise agreements totaled 99 for the three
months ended March 31, 2015, an increase of 68 percent from the same
period of 2014.
-- Domestic relicensing and contract renewal transactions totaled 100 for
the three months ended March 31, 2015, an increase of 20 percent from
the same period of 2014.
-- The company's new construction domestic pipeline of hotels under
construction or approved for development increased 36 percent from March
31, 2014, and the total pipeline increased 30 percent. The increase in
the new construction hotel pipeline was led by the company's Comfort
family of brands which increased 40 percent over the same period of the
prior year.
-- Franchising revenues for the three months ended March 31, 2015, totaled
$75.9 million, an increase of 8 percent from the same period of 2014.
-- Domestic royalty fees for the three months ended March 31, 2015, totaled
$57.8 million, an increase of 9 percent from the same period of 2014.
-- Domestic system-wide revenue per available room ("RevPAR") increased 9.6
percent in the first quarter of 2015, as occupancy and average daily
rates increased 300 basis points and 3.7 percent, respectively from the
same period of 2014.
-- Earnings before interest, taxes, depreciation and amortization
("EBITDA") from franchising activities for the three months ended March
31, 2015, totaled $48.9 million, an increase of 5 percent from the same
period of 2014.
-- Diluted earnings per share ("EPS") from continuing operations for the
three months ended March 31, 2015, totaled $0.37, an increase of 3
percent from the same period of 2014.
-- Domestic units increased 0.2 percent from March 31, 2014.
"Our effort to strengthen our brands and improve business delivery to our franchisees continues to be reflected in our operating results," said Stephen P. Joyce, president and chief executive officer, Choice Hotels. "Our first quarter RevPAR increase of nearly ten percent continued to outpace the gains reported by Smith Travel Research in the chain scale segments in which we compete. In addition, we believe that our focus on improving the quality of hotels within our franchise system has been a significant factor in the more than 20 percent increase in execution of domestic new construction franchise agreements and nearly 70 percent increase in overall domestic franchise agreements. We continue to be optimistic that our focus on these initiatives will allow us to build on our strong first quarter RevPAR and franchise development performance."
Discontinued Operations
During 2014, the company entered into and completed 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 have been eliminated from the on-going operations of the company and the company does not have significant continuing involvement in the operations of the hotels after the disposal transaction. As a result, the company's consolidated statement of income for the three months ended March 31, 2014, reflects these three company-owned hotels as discontinued operations.
Summarized financial information related to these discontinued operations is presented in Exhibit 9 of this press release.
Outlook
The company's consolidated 2015 outlook reflects 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
approximately 32% and 31% for the second quarter and full-year 2015,
respectively.
Franchising
-- EBITDA from franchising activities for full-year 2015 are expected to
range between $254 million and $259 million;
-- Net domestic unit growth for 2015 is expected to be approximately 1%;
-- RevPAR is expected to increase approximately 7% for the second quarter
and range between 6.5% and 8% for full-year 2015; and
-- The effective royalty rate is expected to increase 2 basis points for
full-year 2015 as compared to full-year 2014.
SkyTouch
-- Net reductions in EBITDA relating to our investment in the SkyTouch
division for full-year 2015 are expected to range between $15 million
and $20 million.
Consolidated Outlook
The company's second quarter 2015 diluted EPS is expected to be $0.58. The company expects full-year 2015 diluted EPS to range between $2.14 and $2.21. EBITDA for full-year 2015 are expected to range between $236 million and $241 million.
Conference Call
Choice will conduct a conference call on Wednesday, May 6, 2015 at 10:00 a.m. EDT to discuss the company's first quarter 2015 results. The dial-in number to listen to the call is 1-855-766-6521, and the access code is 22622046. International callers should dial 1-920-663-6286 and enter the access code 22622046. The conference call also will be webcast simultaneously via the company's website, www.choicehotels.com. Interested investors and other parties wishing to access the call via the webcast should go to the website 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 Wednesday, May 6, 2015 through Wednesday, May 13, 2015 by calling 1-855-859-2056 and entering access code 22622046. The international dial-in number for the replay is 1-404-537-3406 and the access code is 22622046. 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.(®) (NYSE: CHH) is one of the world's largest lodging companies. With more than 6,300 hotels franchised in more than 35 countries and territories, we represent more than 500,000 rooms around the globe. As of March 31, 2015, 615 hotels were in our development pipeline. Our company's Ascend Hotel Collection(®), Cambria® hotels & suites, Comfort Inn(®), Comfort Suites(®), Sleep Inn(®), Quality(®), Clarion(®), MainStay Suites(®), Suburban Extended Stay Hotel(®), Econo Lodge(®) and Rodeway Inn(®) brands provide a spectrum of lodging choices to meet our guests' needs. With more than 22 million members and counting, check out our Choice Privileges® rewards program to see how you can reap the benefits of being a member of the Choice Hotels(®) family. Visit us at www.choicehotels.com for more information.
SkyTouch Technology(®) is a business division of Choice Hotels 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," "should," "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, repurchases of common stock 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; foreign currency fluctuations; 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 marketing and reservations systems and other operating systems; or ability to grow our franchise system; exposure to risks related to development activities; fluctuations in the supply and demand for hotels rooms; the level of acceptance of alternative growth strategies we may implement; operating risks associated with our international operations; the outcome of litigation; and our ability to manage 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, EBITDA from franchising activities 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, the SkyTouch Technology operations and revenue generated from the ownership of an office building that is leased to a third-party. 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 hotels & 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 and its subsidiaries.
© 2015 Choice Hotels International, Inc. All rights reserved.
Choice Hotels International, Inc. Exhibit 1
Consolidated Statements of Income
(Unaudited)
Three Months Ended March 31,
----------------------------
Variance
2015 2014 $ %
---- ---- --- ---
(In thousands, except per share amounts)
REVENUES:
Royalty fees $62,431 $58,540 $3,891 7%
Initial franchise and relicensing fees 5,717 3,740 1,977 53%
Procurement services 4,807 4,778 29 1%
Marketing and reservation 98,713 89,606 9,107 10%
Other 3,577 3,072 505 16%
----- ----- --- ---
Total revenues 175,245 159,736 15,509 10%
OPERATING EXPENSES:
Selling, general and administrative 32,438 26,680 5,758 22%
Depreciation and amortization 2,690 2,278 412 18%
Marketing and reservation 98,713 89,606 9,107 10%
------ ------ ----- ---
Total operating expenses 133,841 118,564 15,277 13%
Operating income 41,404 41,172 232 1%
OTHER INCOME AND EXPENSES, NET:
Interest expense 10,179 10,171 8 0%
Interest income (346) (503) 157 (31%)
Other (gains) and losses (468) (59) (409) 693%
Equity in net loss of affiliates 1,005 35 970 2771%
Total other income and expenses, net 10,370 9,644 726 8%
------ ----- --- ---
Income from continuing operations before income taxes 31,034 31,528 (494) (2%)
Income taxes 9,440 10,059 (619) (6%)
----- ------ ---- ---
Income from continuing operations, net of income taxes 21,594 21,469 125 1%
Income from discontinued operations, net of income taxes - 1,641 (1,641) (100%)
--- ----- ------ -----
Net income $21,594 $23,110 $(1,516) (7%)
======= ======= ======= ===
Basic earnings per share
Continuing operations $0.38 $0.37 $0.01 3%
Discontinued operations - 0.03 (0.03) (100%)
$0.38 $0.40 $(0.02) (5%)
===== ===== ====== ===
Diluted earnings per share
Continuing operations $0.37 $0.36 $0.01 3%
Discontinued operations - 0.03 (0.03) (100%)
$0.37 $0.39 $(0.02) (5%)
===== ===== ====== ===
Choice Hotels International, Inc. Exhibit 2
Consolidated Balance Sheets
(In thousands, except per share amounts) March 31 December 31,
2015 2014
---- ----
(Unaudited)
ASSETS
Cash and cash equivalents $200,544 $214,879
Accounts receivable, net 102,013 91,681
Other current assets 54,715 44,854
------ ------
Total
current
assets 357,272 351,414
Fixed assets and intangibles, net 153,870 152,034
Notes receivable, net of allowances 48,781 40,441
Investments, employee benefit plans, at fair
value 17,916 17,539
Other assets 83,283 85,842
------ ------
Total
assets $661,122 $647,270
-------- --------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable and accrued expenses $94,045 $120,654
Deferred revenue 73,908 66,382
Current portion of long-term debt 12,362 12,349
Other current liabilities 1,573 713
----- ---
Total current
liabilities 181,888 200,098
Long-term debt 799,628 782,082
Deferred compensation & retirement plan
obligations 24,259 23,987
Other liabilities 68,840 69,904
------ ------
Total
liabilities 1,074,615 1,076,071
Common stock, $0.01 par value 576 573
Additional paid-in-capital 131,711 127,661
Accumulated other comprehensive loss (8,203) (6,971)
Treasury stock, at cost (979,828) (982,463)
Retained earnings 442,251 432,399
------- -------
Total
shareholders'
deficit (413,493) (428,801)
Total
liabilities
and
shareholders'
deficit $661,122 $647,270
-------- --------
Choice Hotels International,
Inc. Exhibit 3
Consolidated Statements of
Cash Flows
(Unaudited)
(In thousands) Three Months Ended March 31,
----------------------------
2015 2014
---- ----
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $21,594 $23,110
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 2,690 2,278
Gain on sale of assets (292) (2,572)
Provision for bad debts, net 823 1,399
Non-cash stock compensation
and other charges 2,509 2,875
Non-cash interest and other
(income) loss 506 416
Deferred income taxes (233) 2,344
Equity (earnings) losses from
unconsolidated joint
ventures, net of
distributions received 1,205 216
Changes in assets and
liabilities:
Receivables (11,624) (19,931)
Advances to/from marketing
and reservation activities,
net 4,626 10,903
Forgivable notes receivable,
net (13,371) (3,623)
Accounts payable (1,152) 2,080
Accrued expenses (24,052) (19,861)
Income taxes payable/
receivable 2,773 3,160
Deferred revenue 7,552 7,932
Other assets (9,826) (3,103)
Other liabilities 437 (2,359)
--- ------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES (15,835) 5,264
------- -----
CASH FLOWS FROM INVESTING
ACTIVITIES:
Investment in property and
equipment (6,804) (3,015)
Proceeds from sales of assets 1,592 8,703
Equity method investments (1,921) (3,379)
Purchases of investments,
employee benefit plans (1,089) (890)
Proceeds from sales of
investments, employee
benefit plans 925 281
Issuance of mezzanine and
other notes receivable - (587)
Collections of mezzanine and
other notes receivable 105 68
Other items, net (77) (154)
--- ----
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES (7,269) 1,027
------ -----
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net borrowings pursuant to
revolving credit facility 20,700 15,000
Principal payments on long-
term debt (3,082) (2,052)
Purchase of treasury stock (6,227) (4,530)
Dividends paid (11,710) (10,784)
Excess tax benefits from
stock-based compensation 4,473 1,024
Proceeds from exercise of
stock options 5,619 1,547
----- -----
NET CASH PROVIDED BY
FINANCING ACTIVITIES 9,773 205
----- ---
Net change in cash and cash
equivalents (13,331) 6,496
Effect of foreign exchange
rate changes on cash and
cash equivalents (1,004) 587
Cash and cash equivalents at
beginning of period 214,879 167,795
------- -------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $200,544 $174,878
======== ========
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 4
SUPPLEMENTAL OPERATING INFORMATION
DOMESTIC HOTEL SYSTEM
(UNAUDITED)
For the Three Months Ended March 31, 2015 For the Three Months Ended March 31, 2014 Change
----------------------------------------- ----------------------------------------- ------
Average Daily Average Daily Average Daily
Rate Occupancy RevPAR Rate Occupancy RevPAR Rate Occupancy RevPAR
---- --------- ------ ---- --------- ------ ---- --------- ------
Comfort Inn $82.90 57.4% $47.55 $79.22 54.8% $43.40 4.6% 260 bps 9.6%
Comfort Suites 90.12 64.4% 58.02 86.84 60.8% 52.84 3.8% 360 bps 9.8%
Sleep 76.44 59.5% 45.48 72.87 55.6% 40.49 4.9% 390 bps 12.3%
Quality 70.18 52.6% 36.93 67.53 49.6% 33.50 3.9% 300 bps 10.2%
Clarion 75.30 51.5% 38.74 70.95 48.8% 34.61 6.1% 270 bps 11.9%
Econo Lodge 54.41 47.9% 26.06 52.67 44.3% 23.32 3.3% 360 bps 11.7%
Rodeway 53.85 52.7% 28.40 51.21 49.4% 25.32 5.2% 330 bps 12.2%
MainStay 73.58 66.4% 48.85 70.76 64.8% 45.83 4.0% 160 bps 6.6%
Suburban 46.48 74.1% 34.42 43.23 70.3% 30.38 7.5% 380 bps 13.3%
Ascend Hotel Collection 113.19 60.8% 68.79 111.34 58.2% 64.75 1.7% 260 bps 6.2%
------ ---- ----- ------ ---- ----- --- --- --- ---
Total $74.59 55.7% $41.57 $71.94 52.7% $37.92 3.7% 300 bps 9.6%
====== ==== ====== ====== ==== ====== === === === ===
For the Quarter Ended
---------------------
March 31, 2015 March 31, 2014
-------------- --------------
System-wide effective royalty rate 4.31% 4.33%
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 5
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA
(UNAUDITED)
March 31, 2015 March 31, 2014 Variance
-------------- -------------- --------
Hotels Rooms Hotels Rooms Hotels Rooms % %
------ ----- ------ ----- ------ ----- --- ---
Comfort Inn 1,234 95,281 1,297 101,099 (63) (5,818) (4.9%) (5.8%)
Comfort Suites 576 44,519 590 45,609 (14) (1,090) (2.4%) (2.4%)
Sleep 368 26,533 381 27,517 (13) (984) (3.4%) (3.6%)
Quality 1,292 104,654 1,236 102,327 56 2,327 4.5% 2.3%
Clarion 180 25,380 191 27,393 (11) (2,013) (5.8%) (7.3%)
Econo Lodge 853 52,602 840 51,544 13 1,058 1.5% 2.1%
Rodeway 475 26,158 449 25,077 26 1,081 5.8% 4.3%
MainStay 46 3,571 43 3,329 3 242 7.0% 7.3%
Suburban 63 7,048 63 7,152 - (104) 0.0% (1.5%)
Ascend Hotel Collection 110 9,405 103 9,251 7 154 6.8% 1.7%
Cambria hotel & suites 22 2,642 18 2,119 4 523 22.2% 24.7%
--- ----- --- ----- --- --- ---- ----
Domestic Franchises 5,219 397,793 5,211 402,417 8 (4,624) 0.2% (1.1%)
International Franchises 1,143 105,498 1,153 104,735 (10) 763 (0.9%) 0.7%
----- ------- ----- ------- --- --- ----- ---
Total Franchises 6,362 503,291 6,364 507,152 (2) (3,861) (0.0%) (0.8%)
===== ======= ===== ======= === ====== ===== =====
Exhibit 6
CHOICE HOTELS INTERNATIONAL, INC.
SUPPLEMENTAL INFORMATION BY BRAND
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS
(UNAUDITED)
For the Three Months Ended March 31, 2015 For the Three Months Ended March 31,
2014 % Change
----------------------------------------- ------------------------------------- --------
New New New
Construction Conversion Total Construction Conversion Total Construction Conversion Total
------------ ---------- ----- ------------ ---------- ----- ------------ ---------- -----
Comfort Inn 4 7 11 3 3 6 33% 133% 83%
Comfort Suites 5 2 7 1 - 1 400% NM 600%
Sleep 5 - 5 4 - 4 25% NM 25%
Quality 2 29 31 1 10 11 100% 190% 182%
Clarion - 3 3 - 2 2 NM 50% 50%
Econo Lodge - 9 9 - 6 6 NM 50% 50%
Rodeway - 14 14 1 15 16 (100%) (7%) (13%)
MainStay 4 - 4 4 - 4 0% NM 0%
Suburban - 2 2 1 1 2 (100%) 100% 0%
Ascend Hotel Collection 1 10 11 3 3 6 (67%) 233% 83%
Cambria hotel & suites 2 - 2 1 - 1 100% NM 100%
--- --- --- --- --- --- --- --- ---
Total Domestic System 23 76 99 19 40 59 21% 90% 68%
=== === === === === === === === ===
Exhibit 7
CHOICE HOTELS INTERNATIONAL, INC.
DOMESTIC 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, 2015 March 31, 2014 Conversion New Construction Total
Units Units
----- -----
Conversion New Construction Total Conversion New Construction Total Units % Units % Units %
---------- ---------------- ----- ---------- ---------------- ----- ----- --- ----- --- ----- ---
Comfort Inn 33 62 95 39 51 90 (6) (15%) 11 22% 5 6%
Comfort Suites 3 74 77 2 46 48 1 50% 28 61% 29 60%
Sleep Inn 2 73 75 1 48 49 1 100% 25 52% 26 53%
Quality 54 6 60 38 4 42 16 42% 2 50% 18 43%
Clarion 10 2 12 6 2 8 4 67% - 0% 4 50%
Econo Lodge 28 4 32 20 2 22 8 40% 2 100% 10 45%
Rodeway 34 3 37 33 2 35 1 3% 1 50% 2 6%
MainStay 1 47 48 2 35 37 (1) (50%) 12 34% 11 30%
Suburban 6 12 18 6 17 23 - 0% (5) (29%) (5) (22%)
Ascend Hotel Collection 22 20 42 11 12 23 11 100% 8 67% 19 83%
Cambria hotel & suites - 23 23 - 21 21 - NM 2 10% 2 10%
--- --- --- --- --- --- --- --- --- --- --- ---
193 326 519 158 240 398 35 22% 86 36% 121 30%
=== === === === === === === === === === === ===
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,
----------------------------
2015 2014
---- ----
Franchising Revenues:
Total Revenues $175,245 $159,736
Adjustments:
Marketing and reservation revenues (98,713) (89,606)
SkyTouch & Other (603) (53)
Franchising Revenues $75,929 $70,077
Franchising Margins:
Operating Margin:
Total Revenues $175,245 $159,736
Operating Income $41,404 $41,172
Operating Margin 23.6% 25.8%
Franchising Margin:
Franchising Revenues $75,929 $70,077
Operating Income $41,404 $41,172
Non-franchising activities operating loss 5,201 3,506
$46,605 $44,678
------- -------
Franchising Margins 61.4% 63.8%
CALCULATION OF FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES
(dollar amounts in thousands) Three Months Ended March 31,
----------------------------
2015 2014
---- ----
Total Selling, General and Administrative Expenses $32,438 $26,680
SkyTouch & other (5,395) (3,336)
Franchising Selling, General and Administration Expenses $27,043 $23,344
CALCULATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA")
(dollar amounts in thousands)
Three Months Ended March 31,
----------------------------
2015 2014
---- ----
Income from continuing operations, net of income taxes $21,594 $21,469
Income taxes 9,440 10,059
Interest expense 10,179 10,171
Interest income (346) (503)
Other (gains) and losses (468) (59)
Equity in net loss of affiliates 1,005 35
Depreciation and amortization 2,690 2,278
EBITDA $44,094 $43,450
======= =======
Franchising $48,886 $46,733
SkyTouch & other (4,792) (3,283)
$44,094 $43,450
======= =======
CHOICE HOTELS INTERNATIONAL, INC. Exhibit 9
DISCONTINUED OPERATIONS
(UNAUDITED)
Three Months Ended March 31,
----------------------------
(In thousands) 2015 2014
---- ----
REVENUES:
Hotel operations $ - $690
------------------------- ----
Total revenues - 690
OPERATING EXPENSES:
Hotel operations - 662
--- ---
Total operating expenses - 662
Operating income - 28
Gain on disposal of discontinued operations - 2,581
--- -----
Income from discontinued operations before income taxes - 2,609
Income tax - 968
Income from discontinued operations $ - $1,641
========================= ======
Logo - http://photos.prnewswire.com/prnh/20140807/134515
SOURCE Choice Hotels International, Inc.
SOURCE: Choice Hotels International, Inc.
PR Newswire
ROCKVILLE, Md., May 6, 2015
ROCKVILLE, Md., May 6, 2015 /PRNewswire/ -- Choice Hotels International, Inc. (NYSE:CHH) today reported the following highlights for the first quarter 2015:
"Our effort to strengthen our brands and improve business delivery to our franchisees continues to be reflected in our operating results," said Stephen P. Joyce, president and chief executive officer, Choice Hotels. "Our first quarter RevPAR increase of nearly ten percent continued to outpace the gains reported by Smith Travel Research in the chain scale segments in which we compete. In addition, we believe that our focus on improving the quality of hotels within our franchise system has been a significant factor in the more than 20 percent increase in execution of domestic new construction franchise agreements and nearly 70 percent increase in overall domestic franchise agreements. We continue to be optimistic that our focus on these initiatives will allow us to build on our strong first quarter RevPAR and franchise development performance."
Discontinued Operations
During 2014, the company entered into and completed 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 have been eliminated from the on-going operations of the company and the company does not have significant continuing involvement in the operations of the hotels after the disposal transaction. As a result, the company's consolidated statement of income for the three months ended March 31, 2014, reflects these three company-owned hotels as discontinued operations.
Summarized financial information related to these discontinued operations is presented in Exhibit 9 of this press release.
Outlook
The company's consolidated 2015 outlook reflects the following assumptions:
Franchising
SkyTouch
Consolidated Outlook
The company's second quarter 2015 diluted EPS is expected to be $0.58. The company expects full-year 2015 diluted EPS to range between $2.14 and $2.21. EBITDA for full-year 2015 are expected to range between $236 million and $241 million.
Conference Call
Choice will conduct a conference call on Wednesday, May 6, 2015 at 10:00 a.m. EDT to discuss the company's first quarter 2015 results. The dial-in number to listen to the call is 1-855-766-6521, and the access code is 22622046. International callers should dial 1-920-663-6286 and enter the access code 22622046. The conference call also will be webcast simultaneously via the company's website, www.choicehotels.com. Interested investors and other parties wishing to access the call via the webcast should go to the website 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 Wednesday, May 6, 2015 through Wednesday, May 13, 2015 by calling 1-855-859-2056 and entering access code 22622046. The international dial-in number for the replay is 1-404-537-3406 and the access code is 22622046. 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.® (NYSE: CHH) is one of the world's largest lodging companies. With more than 6,300 hotels franchised in more than 35 countries and territories, we represent more than 500,000 rooms around the globe. As of March 31, 2015, 615 hotels were in our development pipeline. Our company's Ascend Hotel Collection®, Cambria® hotels & suites, Comfort Inn®, Comfort Suites®, Sleep Inn®, Quality®, Clarion®, MainStay Suites®, Suburban Extended Stay Hotel®, Econo Lodge® and Rodeway Inn® brands provide a spectrum of lodging choices to meet our guests' needs. With more than 22 million members and counting, check out our Choice Privileges® rewards program to see how you can reap the benefits of being a member of the Choice Hotels® family. Visit us at www.choicehotels.com for more information.
SkyTouch Technology® is a business division of Choice Hotels 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," "should," "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, repurchases of common stock 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; foreign currency fluctuations; 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 marketing and reservations systems and other operating systems; or ability to grow our franchise system; exposure to risks related to development activities; fluctuations in the supply and demand for hotels rooms; the level of acceptance of alternative growth strategies we may implement; operating risks associated with our international operations; the outcome of litigation; and our ability to manage 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, EBITDA from franchising activities 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, the SkyTouch Technology operations and revenue generated from the ownership of an office building that is leased to a third-party. 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 hotels & 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 and its subsidiaries.
© 2015 Choice Hotels International, Inc. All rights reserved.
|
Choice Hotels International, Inc. |
Exhibit 1 |
|||||||
|
Consolidated Statements of Income |
||||||||
|
(Unaudited) |
||||||||
|
Three Months Ended March 31, |
||||||||
|
Variance |
||||||||
|
2015 |
2014 |
$ |
% |
|||||
|
(In thousands, except per share amounts) |
||||||||
|
REVENUES: |
||||||||
|
Royalty fees |
$ 62,431 |
$ 58,540 |
$ 3,891 |
7% |
||||
|
Initial franchise and relicensing fees |
5,717 |
3,740 |
1,977 |
53% |
||||
|
Procurement services |
4,807 |
4,778 |
29 |
1% |
||||
|
Marketing and reservation |
98,713 |
89,606 |
9,107 |
10% |
||||
|
Other |
3,577 |
3,072 |
505 |
16% |
||||
|
Total revenues |
175,245 |
159,736 |
15,509 |
10% |
||||
|
OPERATING EXPENSES: |
||||||||
|
Selling, general and administrative |
32,438 |
26,680 |
5,758 |
22% |
||||
|
Depreciation and amortization |
2,690 |
2,278 |
412 |
18% |
||||
|
Marketing and reservation |
98,713 |
89,606 |
9,107 |
10% |
||||
|
Total operating expenses |
133,841 |
118,564 |
15,277 |
13% |
||||
|
Operating income |
41,404 |
41,172 |
232 |
1% |
||||
|
OTHER INCOME AND EXPENSES, NET: |
||||||||
|
Interest expense |
10,179 |
10,171 |
8 |
0% |
||||
|
Interest income |
(346) |
(503) |
157 |
(31%) |
||||
|
Other (gains) and losses |
(468) |
(59) |
(409) |
693% |
||||
|
Equity in net loss of affiliates |
1,005 |
35 |
970 |
2771% |
||||
|
Total other income and expenses, net |
10,370 |
9,644 |
726 |
8% |
||||
|
Income from continuing operations before income taxes |
31,034 |
31,528 |
(494) |
(2%) |
||||
|
Income taxes |
9,440 |
10,059 |
(619) |
(6%) |
||||
|
Income from continuing operations, net of income taxes |
21,594 |
21,469 |
125 |
1% |
||||
|
Income from discontinued operations, net of income taxes |
- |
1,641 |
(1,641) |
(100%) |
||||
|
Net income |
$ 21,594 |
$ 23,110 |
$ (1,516) |
(7%) |
||||
|
Basic earnings per share |
||||||||
|
Continuing operations |
$ 0.38 |
$ 0.37 |
$ 0.01 |
3% |
||||
|
Discontinued operations |
- |
0.03 |
(0.03) |
(100%) |
||||
|
$ 0.38 |
$ 0.40 |
$ (0.02) |
(5%) |
|||||
|
Diluted earnings per share |
||||||||
|
Continuing operations |
$ 0.37 |
$ 0.36 |
$ 0.01 |
3% |
||||
|
Discontinued operations |
- |
0.03 |
(0.03) |
(100%) |
||||
|
$ 0.37 |
$ 0.39 |
$ (0.02) |
(5%) |
|||||
|
Choice Hotels International, Inc. |
Exhibit 2 |
||||||
|
Consolidated Balance Sheets |
|||||||
|
(In thousands, except per share amounts) |
March 31 |
December 31, |
|||||
|
2015 |
2014 |
||||||
|
(Unaudited) |
|||||||
|
ASSETS |
|||||||
|
Cash and cash equivalents |
$ 200,544 |
$ 214,879 |
|||||
|
Accounts receivable, net |
102,013 |
91,681 |
|||||
|
Other current assets |
54,715 |
44,854 |
|||||
|
Total current assets |
357,272 |
351,414 |
|||||
|
Fixed assets and intangibles, net |
153,870 |
152,034 |
|||||
|
Notes receivable, net of allowances |
48,781 |
40,441 |
|||||
|
Investments, employee benefit plans, at fair value |
17,916 |
17,539 |
|||||
|
Other assets |
83,283 |
85,842 |
|||||
|
Total assets |
$ 661,122 |
$ 647,270 |
|||||
|
LIABILITIES AND SHAREHOLDERS' DEFICIT |
|||||||
|
Accounts payable and accrued expenses |
$ 94,045 |
$ 120,654 |
|||||
|
Deferred revenue |
73,908 |
66,382 |
|||||
|
Current portion of long-term debt |
12,362 |
12,349 |
|||||
|
Other current liabilities |
1,573 |
713 |
|||||
|
Total current liabilities |
181,888 |
200,098 |
|||||
|
Long-term debt |
799,628 |
782,082 |
|||||
|
Deferred compensation & retirement plan obligations |
24,259 |
23,987 |
|||||
|
Other liabilities |
68,840 |
69,904 |
|||||
|
Total liabilities |
1,074,615 |
1,076,071 |
|||||
|
Common stock, $0.01 par value |
576 |
573 |
|||||
|
Additional paid-in-capital |
131,711 |
127,661 |
|||||
|
Accumulated other comprehensive loss |
(8,203) |
(6,971) |
|||||
|
Treasury stock, at cost |
(979,828) |
(982,463) |
|||||
|
Retained earnings |
442,251 |
432,399 |
|||||
|
Total shareholders' deficit |
(413,493) |
(428,801) |
|||||
|
Total liabilities and shareholders' deficit |
$ 661,122 |
$ 647,270 |
|||||
|
Choice Hotels International, Inc. |
Exhibit 3 |
||
|
Consolidated Statements of Cash Flows |
|||
|
(Unaudited) |
|||
|
(In thousands) |
Three Months Ended March 31, |
||
|
2015 |
2014 |
||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||
|
Net income |
$ 21,594 |
$ 23,110 |
|
|
Adjustments to reconcile net income to net cash provided |
|||
|
by operating activities: |
|||
|
Depreciation and amortization |
2,690 |
2,278 |
|
|
Gain on sale of assets |
(292) |
(2,572) |
|
|
Provision for bad debts, net |
823 |
1,399 |
|
|
Non-cash stock compensation and other charges |
2,509 |
2,875 |
|
|
Non-cash interest and other (income) loss |
506 |
416 |
|
|
Deferred income taxes |
(233) |
2,344 |
|
|
Equity (earnings) losses from unconsolidated joint ventures, net of distributions received |
1,205 |
216 |
|
|
Changes in assets and liabilities: |
|||
|
Receivables |
(11,624) |
(19,931) |
|
|
Advances to/from marketing and reservation activities, net |
4,626 |
10,903 |
|
|
Forgivable notes receivable, net |
(13,371) |
(3,623) |
|
|
Accounts payable |
(1,152) |
2,080 |
|
|
Accrued expenses |
(24,052) |
(19,861) |
|
|
Income taxes payable/receivable |
2,773 |
3,160 |
|
|
Deferred revenue |
7,552 |
7,932 |
|
|
Other assets |
(9,826) |
(3,103) |
|
|
Other liabilities |
437 |
(2,359) |
|
|
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES |
(15,835) |
5,264 |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||
|
Investment in property and equipment |
(6,804) |
(3,015) |
|
|
Proceeds from sales of assets |
1,592 |
8,703 |
|
|
Equity method investments |
(1,921) |
(3,379) |
|
|
Purchases of investments, employee benefit plans |
(1,089) |
(890) |
|
|
Proceeds from sales of investments, employee benefit plans |
925 |
281 |
|
|
Issuance of mezzanine and other notes receivable |
- |
(587) |
|
|
Collections of mezzanine and other notes receivable |
105 |
68 |
|
|
Other items, net |
(77) |
(154) |
|
|
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES |
(7,269) |
1,027 |
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||
|
Net borrowings pursuant to revolving credit facility |
20,700 |
15,000 |
|
|
Principal payments on long-term debt |
(3,082) |
(2,052) |
|
|
Purchase of treasury stock |
(6,227) |
(4,530) |
|
|
Dividends paid |
(11,710) |
(10,784) |
|
|
Excess tax benefits from stock-based compensation |
4,473 |
1,024 |
|
|
Proceeds from exercise of stock options |
5,619 |
1,547 |
|
|
NET CASH PROVIDED BY FINANCING ACTIVITIES |
9,773 |
205 |
|
|
Net change in cash and cash equivalents |
(13,331) |
6,496 |
|
|
Effect of foreign exchange rate changes on cash and cash equivalents |
(1,004) |
587 |
|
|
Cash and cash equivalents at beginning of period |
214,879 |
167,795 |
|
|
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ 200,544 |
$ 174,878 |
|
|
CHOICE HOTELS INTERNATIONAL, INC. |
Exhibit 4 |
||||||||||||||||||||
|
SUPPLEMENTAL OPERATING INFORMATION |
|||||||||||||||||||||
|
DOMESTIC HOTEL SYSTEM |
|||||||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||||||
|
For the Three Months Ended March 31, 2015 |
For the Three Months Ended March 31, 2014 |
Change |
|||||||||||||||||||
|
Average Daily |
Average Daily |
Average Daily |
|||||||||||||||||||
|
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
Rate |
Occupancy |
RevPAR |
|||||||||||||
|
Comfort Inn |
$ 82.90 |
57.4% |
$ 47.55 |
$ 79.22 |
54.8% |
$ 43.40 |
4.6% |
260 |
bps |
9.6% |
|||||||||||
|
Comfort Suites |
90.12 |
64.4% |
58.02 |
86.84 |
60.8% |
52.84 |
3.8% |
360 |
bps |
9.8% |
|||||||||||
|
Sleep |
76.44 |
59.5% |
45.48 |
72.87 |
55.6% |
40.49 |
4.9% |
390 |
bps |
12.3% |
|||||||||||
|
Quality |
70.18 |
52.6% |
36.93 |
67.53 |
49.6% |
33.50 |
3.9% |
300 |
bps |
10.2% |
|||||||||||
|
Clarion |
75.30 |
51.5% |
38.74 |
70.95 |
48.8% |
34.61 |
6.1% |
270 |
bps |
11.9% |
|||||||||||
|
Econo Lodge |
54.41 |
47.9% |
26.06 |
52.67 |
44.3% |
23.32 |
3.3% |
360 |
bps |
11.7% |
|||||||||||
|
Rodeway |
53.85 |
52.7% |
28.40 |
51.21 |
49.4% |
25.32 |
5.2% |
330 |
bps |
12.2% |
|||||||||||
|
MainStay |
73.58 |
66.4% |
48.85 |
70.76 |
64.8% |
45.83 |
4.0% |
160 |
bps |
6.6% |
|||||||||||
|
Suburban |
46.48 |
74.1% |
34.42 |
43.23 |
70.3% |
30.38 |
7.5% |
380 |
bps |
13.3% |
|||||||||||
|
Ascend Hotel Collection |
113.19 |
60.8% |
68.79 |
111.34 |
58.2% |
64.75 |
1.7% |
260 |
bps |
6.2% |
|||||||||||
|
Total |
$ 74.59 |
55.7% |
$ 41.57 |
$ 71.94 |
52.7% |
$ 37.92 |
3.7% |
300 |
bps |
9.6% |
|||||||||||
|
For the Quarter Ended |
|||||||||||||||||||||
|
March 31, 2015 |
March 31, 2014 |
||||||||||||||||||||
|
System-wide effective royalty rate |
4.31% |
4.33% |
|||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
Exhibit 5 |
||||||||||||||||
|
SUPPLEMENTAL HOTEL AND ROOM SUPPLY DATA |
|||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||
|
March 31, 2015 |
March 31, 2014 |
Variance |
|||||||||||||||
|
Hotels |
Rooms |
Hotels |
Rooms |
Hotels |
Rooms |
% |
% |
||||||||||
|
Comfort Inn |
1,234 |
95,281 |
1,297 |
101,099 |
(63) |
(5,818) |
(4.9%) |
(5.8%) |
|||||||||
|
Comfort Suites |
576 |
44,519 |
590 |
45,609 |
(14) |
(1,090) |
(2.4%) |
(2.4%) |
|||||||||
|
Sleep |
368 |
26,533 |
381 |
27,517 |
(13) |
(984) |
(3.4%) |
(3.6%) |
|||||||||
|
Quality |
1,292 |
104,654 |
1,236 |
102,327 |
56 |
2,327 |
4.5% |
2.3% |
|||||||||
|
Clarion |
180 |
25,380 |
191 |
27,393 |
(11) |
(2,013) |
(5.8%) |
(7.3%) |
|||||||||
|
Econo Lodge |
853 |
52,602 |
840 |
51,544 |
13 |
1,058 |
1.5% |
2.1% |
|||||||||
|
Rodeway |
475 |
26,158 |
449 |
25,077 |
26 |
1,081 |
5.8% |
4.3% |
|||||||||
|
MainStay |
46 |
3,571 |
43 |
3,329 |
3 |
242 |
7.0% |
7.3% |
|||||||||
|
Suburban |
63 |
7,048 |
63 |
7,152 |
- |
(104) |
0.0% |
(1.5%) |
|||||||||
|
Ascend Hotel Collection |
110 |
9,405 |
103 |
9,251 |
7 |
154 |
6.8% |
1.7% |
|||||||||
|
Cambria hotel & suites |
22 |
2,642 |
18 |
2,119 |
4 |
523 |
22.2% |
24.7% |
|||||||||
|
Domestic Franchises |
5,219 |
397,793 |
5,211 |
402,417 |
8 |
(4,624) |
0.2% |
(1.1%) |
|||||||||
|
International Franchises |
1,143 |
105,498 |
1,153 |
104,735 |
(10) |
763 |
(0.9%) |
0.7% |
|||||||||
|
Total Franchises |
6,362 |
503,291 |
6,364 |
507,152 |
(2) |
(3,861) |
(0.0%) |
(0.8%) |
|||||||||
|
Exhibit 6 |
|||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
|||||||||||||||||||
|
SUPPLEMENTAL INFORMATION BY BRAND |
|||||||||||||||||||
|
DEVELOPMENT RESULTS -- DOMESTIC NEW HOTEL CONTRACTS |
|||||||||||||||||||
|
(UNAUDITED) |
|||||||||||||||||||
|
For the Three Months Ended March 31, 2015 |
For the Three Months Ended March 31, 2014 |
% Change |
|||||||||||||||||
|
New |
New |
New |
|||||||||||||||||
|
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
Construction |
Conversion |
Total |
|||||||||||
|
Comfort Inn |
4 |
7 |
11 |
3 |
3 |
6 |
33% |
133% |
83% |
||||||||||
|
Comfort Suites |
5 |
2 |
7 |
1 |
- |
1 |
400% |
NM |
600% |
||||||||||
|
Sleep |
5 |
- |
5 |
4 |
- |
4 |
25% |
NM |
25% |
||||||||||
|
Quality |
2 |
29 |
31 |
1 |
10 |
11 |
100% |
190% |
182% |
||||||||||
|
Clarion |
- |
3 |
3 |
- |
2 |
2 |
NM |
50% |
50% |
||||||||||
|
Econo Lodge |
- |
9 |
9 |
- |
6 |
6 |
NM |
50% |
50% |
||||||||||
|
Rodeway |
- |
14 |
14 |
1 |
15 |
16 |
(100%) |
(7%) |
(13%) |
||||||||||
|
MainStay |
4 |
- |
4 |
4 |
- |
4 |
0% |
NM |
0% |
||||||||||
|
Suburban |
- |
2 |
2 |
1 |
1 |
2 |
(100%) |
100% |
0% |
||||||||||
|
Ascend Hotel Collection |
1 |
10 |
11 |
3 |
3 |
6 |
(67%) |
233% |
83% |
||||||||||
|
Cambria hotel & suites |
2 |
- |
2 |
1 |
- |
1 |
100% |
NM |
100% |
||||||||||
|
Total Domestic System |
23 |
76 |
99 |
19 |
40 |
59 |
21% |
90% |
68% |
||||||||||
|
Exhibit 7 |
||||||||||||||||||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
||||||||||||||||||||||||
|
DOMESTIC 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, 2015 |
March 31, 2014 |
Conversion |
New Construction |
Total |
||||||||||||||||||||
|
Conversion |
New Construction |
Total |
Conversion |
New Construction |
Total |
Units |
% |
Units |
% |
Units |
% |
|||||||||||||
|
Comfort Inn |
33 |
62 |
95 |
39 |
51 |
90 |
(6) |
(15%) |
11 |
22% |
5 |
6% |
||||||||||||
|
Comfort Suites |
3 |
74 |
77 |
2 |
46 |
48 |
1 |
50% |
28 |
61% |
29 |
60% |
||||||||||||
|
Sleep Inn |
2 |
73 |
75 |
1 |
48 |
49 |
1 |
100% |
25 |
52% |
26 |
53% |
||||||||||||
|
Quality |
54 |
6 |
60 |
38 |
4 |
42 |
16 |
42% |
2 |
50% |
18 |
43% |
||||||||||||
|
Clarion |
10 |
2 |
12 |
6 |
2 |
8 |
4 |
67% |
- |
0% |
4 |
50% |
||||||||||||
|
Econo Lodge |
28 |
4 |
32 |
20 |
2 |
22 |
8 |
40% |
2 |
100% |
10 |
45% |
||||||||||||
|
Rodeway |
34 |
3 |
37 |
33 |
2 |
35 |
1 |
3% |
1 |
50% |
2 |
6% |
||||||||||||
|
MainStay |
1 |
47 |
48 |
2 |
35 |
37 |
(1) |
(50%) |
12 |
34% |
11 |
30% |
||||||||||||
|
Suburban |
6 |
12 |
18 |
6 |
17 |
23 |
- |
0% |
(5) |
(29%) |
(5) |
(22%) |
||||||||||||
|
Ascend Hotel Collection |
22 |
20 |
42 |
11 |
12 |
23 |
11 |
100% |
8 |
67% |
19 |
83% |
||||||||||||
|
Cambria hotel & suites |
- |
23 |
23 |
- |
21 |
21 |
- |
NM |
2 |
10% |
2 |
10% |
||||||||||||
|
193 |
326 |
519 |
158 |
240 |
398 |
35 |
22% |
86 |
36% |
121 |
30% |
|||||||||||||
|
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, |
|||||||||
|
2015 |
2014 |
|||||||||
|
Franchising Revenues: |
||||||||||
|
Total Revenues |
$ 175,245 |
$ 159,736 |
||||||||
|
Adjustments: |
||||||||||
|
Marketing and reservation revenues |
(98,713) |
(89,606) |
||||||||
|
SkyTouch & Other |
(603) |
(53) |
||||||||
|
Franchising Revenues |
$ 75,929 |
$ 70,077 |
||||||||
|
Franchising Margins: |
||||||||||
|
Operating Margin: |
||||||||||
|
Total Revenues |
$ 175,245 |
$ 159,736 |
||||||||
|
Operating Income |
$ 41,404 |
$ 41,172 |
||||||||
|
Operating Margin |
23.6% |
25.8% |
||||||||
|
Franchising Margin: |
||||||||||
|
Franchising Revenues |
$ 75,929 |
$ 70,077 |
||||||||
|
Operating Income |
$ 41,404 |
$ 41,172 |
||||||||
|
Non-franchising activities operating loss |
5,201 |
3,506 |
||||||||
|
$ 46,605 |
$ 44,678 |
|||||||||
|
Franchising Margins |
61.4% |
63.8% |
||||||||
|
CALCULATION OF FRANCHISING SELLING, GENERAL AND ADMINISTRATION EXPENSES |
||||||||||
|
(dollar amounts in thousands) |
Three Months Ended March 31, |
|||||||||
|
2015 |
2014 |
|||||||||
|
Total Selling, General and Administrative Expenses |
$ 32,438 |
$ 26,680 |
||||||||
|
SkyTouch & other |
(5,395) |
(3,336) |
||||||||
|
Franchising Selling, General and Administration Expenses |
$ 27,043 |
$ 23,344 |
||||||||
|
CALCULATION OF EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ("EBITDA") |
||||||||||
|
(dollar amounts in thousands) |
||||||||||
|
Three Months Ended March 31, |
||||||||||
|
2015 |
2014 |
|||||||||
|
Income from continuing operations, net of income taxes |
$ 21,594 |
$ 21,469 |
||||||||
|
Income taxes |
9,440 |
10,059 |
||||||||
|
Interest expense |
10,179 |
10,171 |
||||||||
|
Interest income |
(346) |
(503) |
||||||||
|
Other (gains) and losses |
(468) |
(59) |
||||||||
|
Equity in net loss of affiliates |
1,005 |
35 |
||||||||
|
Depreciation and amortization |
2,690 |
2,278 |
||||||||
|
EBITDA |
$ 44,094 |
$ 43,450 |
||||||||
|
Franchising |
$ 48,886 |
$ 46,733 |
||||||||
|
SkyTouch & other |
(4,792) |
(3,283) |
||||||||
|
$ 44,094 |
$ 43,450 |
|||||||||
|
CHOICE HOTELS INTERNATIONAL, INC. |
Exhibit 9 |
|||||||
|
DISCONTINUED OPERATIONS |
||||||||
|
(UNAUDITED) |
||||||||
|
Three Months Ended March 31, |
||||||||
|
(In thousands) |
2015 |
2014 |
||||||
|
REVENUES: |
||||||||
|
Hotel operations |
$ - |
$ 690 |
||||||
|
Total revenues |
- |
690 |
||||||
|
OPERATING EXPENSES: |
||||||||
|
Hotel operations |
- |
662 |
||||||
|
Total operating expenses |
- |
662 |
||||||
|
Operating income |
- |
28 |
||||||
|
Gain on disposal of discontinued operations |
- |
2,581 |
||||||
|
Income from discontinued operations before income taxes |
- |
2,609 |
||||||
|
Income tax |
- |
968 |
||||||
|
Income from discontinued operations |
$ - |
$ 1,641 |
||||||
Logo - http://photos.prnewswire.com/prnh/20140807/134515
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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